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Experience with Large Fiscal Adjustments


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  • Mark A. Horton
  • George C. Tsibouris
  • Wojciech Maliszewski
  • Mark J Flanagan
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    When policymakers have little option but to consider a sizable fiscal adjustment, they are confronted by the following questions: Can a large fiscal adjustment be implemented succesfully? How is a large adjustment best designed and implemented? What will be its impact on the economy? This Occasional Paper addresses these questions by describing the experience of countries that have undertaken large fiscal adjustments in the last three decades. It provides operational guidance to policymakers by identifying preconditions, common policy approaches, and institutional arrangements underlying successful and unsuccessful adjustment episodes.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Occasional Papers with number 246.

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    Length: 51
    Date of creation: 14 Jun 2006
    Date of revision:
    Handle: RePEc:imf:imfocp:246

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    Postal: International Monetary Fund, Washington, DC USA
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    Keywords: Fiscal management; expenditure; fiscal adjustment; expenditures; fiscal adjustments; fiscal policy; public debt; expenditure cuts; expenditure management; spending cuts; taxation; fiscal reforms; government expenditures; tax revenues; tax administration; fiscal consolidation; inflation; structural fiscal; structural fiscal reforms; expenditure control; tax reforms; tax policy; primary expenditure; primary current expenditure; tax reform; aggregate demand; public expenditure; fiscal responsibility; fiscal adjustment episodes; primary deficit; expenditure policy; capital expenditures; fiscal balance; fiscal issues; paper; fiscal consolidations; central government expenditures; fiscal stance; medium-term expenditure frameworks; tax bases; fiscal vulnerability; fiscal responsibility law; lower inflation; budget law; structural adjustment; fiscal outcomes; fiscal affairs department; domestic indirect taxes; fiscal position; tax ratio; inflationary pressures; fiscal revenues; expansionary fiscal; real interest rates; fiscal federalism; capital expenditure; tax increase; tax burden; expenditure restraint; defense spending; debt service; tax system; tax base; fiscal crisis; expenditure reduction; high tax burden; public expenditure management; fiscal impact; fiscal affairs; fiscal contraction; fiscal conditions; budget rigidities; intergovernmental fiscal; tax compliance; expenditure frameworks; macroeconomic performance; fiscal policy frameworks; debt-service; low inflation; employment; fiscal arrangements; budget process; intergovernmental fiscal arrangements; medium-term expenditure; expansionary fiscal contraction; fiscal institutions; public employment; subnational expenditure; fiscal design; expansionary fiscal consolidations; account deficits; inflationary pressure; fiscal pressures; change in expenditures; expenditure adjustment; intergovernmental transfers; tax increases; fiscal stress; fiscal problems; employment reduction; fiscal transparency; fiscal responsibility laws; tax rates; expenditure planning; annual budget; municipal spending; tax payments; high spending; expenditure composition; foreign debt; expenditure forecasting; fiscal accounts; fiscal developments; primary fiscal deficits; expenditure rationalization; medium-term budgetary frameworks; expenditure requirements; fiscal policy management; fiscal control; tax collection; fiscal data; tax structure; fiscal prudence; spending control; fiscal vulnerabilities; loose fiscal policy; fiscal indicators; public external debt; total expenditures; fiscal performance; personnel expenditures; expenditure management systems; fiscal contractions; tax expenditures; fiscal effort; fiscal discipline; fiscal austerity; budgetary consolidation; fiscal targets; fiscal deficits; public financial management; fiscal balances; central government tax revenues;


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    Cited by:
    1. Jens R. Clausen & Sharmini Coorey & Bakar Ould-Abdallah & Sònia Muñoz & Norbert Funke, 2007. "Lessons From High Inflation Epidsodes for Stabilizing the Economy in Zimbabwe," IMF Working Papers 07/99, International Monetary Fund.
    2. Alexander Plekhanov & Manmohan S. Kumar & Daniel Leigh, 2007. "Fiscal Adjustments," IMF Working Papers 07/178, International Monetary Fund.
    3. Borys, Paweł & Ciżkowicz, Piotr & Rzońca, Andrzej, 2011. "Panel data evidence on non-Keynesian efects of fiscal policy in the EU New Member," MPRA Paper 32696, University Library of Munich, Germany.
    4. Margit Molnár, 2012. "Fiscal consolidation: What factors determine the success of consolidation efforts?," OECD Journal: Economic Studies, OECD Publishing, vol. 2012(1), pages 123-149.
    5. Gros, Daniel & Alcidi, Cinzia & Belke, Ansgar & Coutinho, Leonor & Giovannini, Alessandro, 2014. "Implementation of the Macroeconomic Adjustment Programmes in the Euro Area: State-of-Play," CEPS Papers 9017, Centre for European Policy Studies.
    6. Margit Molnar, 2012. "Fiscal Consolidation: Part 5. What Factors Determine the Success of Consolidation Efforts?," OECD Economics Department Working Papers 936, OECD Publishing.


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