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What Determines the Costs of Fiscal Consolidations?

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  • Mathias Klein

Abstract

Recent studies have proposed several factors that determine how fiscal consolidations affect the economy. This Roundup focuses on several of these determinants. Namely, it discusses how the composition of the consolidation measure, the state of the business cycle, the level of private indebtedness and the amount of fiscal stress during which the measure is implemented influences the consequences of austerity. It seems reasonable to consider these factors more carefully when deciding about the type and timing of fiscal consolidation plans.

Suggested Citation

  • Mathias Klein, 2018. "What Determines the Costs of Fiscal Consolidations?," DIW Roundup: Politik im Fokus 120, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwrup:120en
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.578439.de/DIW_Roundup_120_en.pdf
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    References listed on IDEAS

    as
    1. Alesina, Alberto & Favero, Carlo & Giavazzi, Francesco, 2015. "The output effect of fiscal consolidation plans," Journal of International Economics, Elsevier, vol. 96(S1), pages 19-42.
    2. Klein, Mathias, 2016. "Austerity and private debt," Ruhr Economic Papers 642, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Klein, Mathias & Winkler, Roland, 2019. "Austerity, inequality, and private debt overhang," European Journal of Political Economy, Elsevier, vol. 57(C), pages 89-106.
    4. Klein, Mathias, 2016. "Austerity and Private Debt," VfS Annual Conference 2016 (Augsburg): Demographic Change 145681, Verein für Socialpolitik / German Economic Association.
    5. Mathias Klein, 2016. "Austerity and Private Debt," Discussion Papers of DIW Berlin 1611, DIW Berlin, German Institute for Economic Research.
    6. Rendahl, Pontus, 2014. "Fiscal Policy in an Unemployment Crisis," CEPR Discussion Papers 9992, C.E.P.R. Discussion Papers.
    7. Philipp Engler & Mathias Klein, 2017. "Austerity Measures Amplified Crisis in Spain, Portugal, and Italy," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 7(8), pages 89-93.
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