Debt Consolidation and Financial Stability
AbstractWe compare three alternative post-crisis public debt consolidation policies (respectively based on expenditure cuts, labour tax or consumption tax increases) in their effects on key macro variables and on bank stability. Labor tax-based policies attain a rapid debt adjustment and low intertemporal debt costs, but at the expense of higher oscillations in bank leverage and risk. Expenditure based and consumption tax-based strategies perform better and similarly between themselves.
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Bibliographic InfoArticle provided by Presses de Sciences-Po in its journal Revue économique.
Volume (Year): 62 (2011)
Issue (Month): 6 ()
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- Cimadomo, Jacopo & Hauptmeier, Sebastian & Zimmermann, Tom, 2012.
"Fiscal consolidations and banking stability,"
42229, University Library of Munich, Germany.
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