Fiscal Consolidation in Israel: A Global Fiscal Model Perspective
AbstractFiscal consolidation has become a central policy prescription for many highly indebted emerging market countries (EMCs). Although prudent fiscal policies tend to reduce vulnerabilities, their implementation is usually postponed. This paper is one of the first attempts in the literature to quantify the costs of delaying fiscal consolidation in an EMC. Using the International Monetary Fund's Global Fiscal Model, we find that early consolidation through expenditure cuts results in a substantial increase in Israel's long-term output growth over delayed fiscal adjustment. Moreover, the more flexible are the factor markets, the larger is this output gain.
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Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Emerging Markets Finance and Trade.
Volume (Year): 43 (2007)
Issue (Month): 6 (November)
Contact details of provider:
Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=111024
distortionary taxes; fiscal consolidation; government debt;
Other versions of this item:
- Natan P. Epstein & Selim Elekdag & Marialuz Moreno Badia, 2006. "Fiscal Consolidation in Israel: A Global Fiscal Model Perspective," IMF Working Papers 06/253, International Monetary Fund.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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