Fiscal Adjustment in Pakistan: Some Simulation Results
AbstractPakistan has experienced high fiscal deficits for over two decades. The accumulation of debt over this period implies that a substantial adjustment will be required to attain a sustainable fiscal position over the medium term. By simulating an estimated macroeconomic model for Pakistan, this paper compares the likely macroeconomic consequences of achieving fiscal adjustment alternatively through reductions in public consumption or public investment or through increasing tax receipts. The most favorable medium-term growth and inflation outcomes are associated with reduced public consumption; the least favorable correspond to reduced public investment. Revenue increases occupy an intermediate position.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.
Volume (Year): 40 (1993)
Issue (Month): 2 (June)
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Find related papers by JEL classification:
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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