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New Evidenceon Fiscal Adjustment and Growth in Transition Economies

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  • Sanjeev Gupta
  • Alejandro Simone
  • Alex Segura-Ubiergo

Abstract

This paper analyzes the relationship between fiscal adjustment and real GDP growth in a panel of 26 transition economies during 1992-2001. Unlike most previous studies using cross-country regressions, the paper finds a positive and statistically significant relationship between fiscal adjustment and growth that is robust to different model specifications and estimation methods. The paper also presents country experiences to delve deeper into the mechanisms that may underlie this statistical relationship.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/244.

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Length: 33
Date of creation: 01 Oct 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/244

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Keywords: Transition economies; Adjustment process; Economic growth; fiscal adjustment; fiscal policy; fiscal balance; transition countries; fiscal deficit; aggregate demand; fiscal deficits; fiscal adjustments; fiscal positions; current account balance; fiscal sustainability; political economy; fiscal adjustment in transition; output growth; fiscal balances; terms of trade; fiscal consolidation; change in expenditures; taxation; fiscal stance; transition periods; income distribution; long-term fiscal sustainability; fiscal adjustment efforts; budget deficits; government spending; inflation stabilization; fiscal policies; expenditure composition; transition period; fiscal contractions; public expenditures; account deficits; public spending; fiscal contraction; tax reform; foreign debt; expenditure programs; terms of trade loss; per capita growth rate; fiscal revenues; fiscal transfers; public expenditure; budget balances; investment flows; fiscal position; fiscal affairs; market liberalization; level of expenditures; trade shock; transition ? period; factor accumulation; tax collections; budget constraints; fiscal consolidations; market entry; national budget; fiscal spending; expenditure growth; fiscal affairs department; fiscal costs; balance of payments;

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References

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Citations

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Cited by:
  1. World Bank, 2011. "Republic of Tajikistan - Country Economic Memorandum : Tajikistan’s Quest for Growth: Stimulating Private Investment," World Bank Other Operational Studies 2761, The World Bank.
  2. Borys, Paweł & Ciżkowicz, Piotr & Rzońca, Andrzej, 2013. "Panel data evidence on effects of fiscal impulses in the EU New Member States," MPRA Paper 48243, University Library of Munich, Germany.
  3. Moreno-Dodson, Blanca & Bayraktar, Nihal, 2011. "How Public Spending Can Help You Grow: An Empirical Analysis for Developing Countries," World Bank - Economic Premise, The World Bank, issue 48, pages 1-4, January.
  4. Brownbridge, Martin & Canagarajah, Sudharshan, 2008. "Fiscal policy for growth and development in Tajikistan," Policy Research Working Paper Series 4532, The World Bank.
  5. Blanca Moreno-Dodson & Nihal Bayraktar, 2011. "How Public Spending Can Help You Grow : An Empirical Analysis for Developing Countries," World Bank Other Operational Studies 10107, The World Bank.
  6. Laura Obreja Braşoveanu, 2012. "Correlation Between Government and Economic Growth - Specific Features for 10 Nms," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 2(5), pages 14, October.
  7. 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.
  8. Paweł Borys & Piotr Ciżkowicz & Andrzej Rzońca, 2013. "Panel data evidence on the effects of fiscal impulses in the EU New Member States," National Bank of Poland Working Papers 161, National Bank of Poland, Economic Institute.
  9. Teresa Ter-Minassian & Richard Hughes & Alejandro Hajdenberg, 2008. "Creating Sustainable Fiscal Space for Infrastructure," IMF Working Papers 08/256, International Monetary Fund.
  10. Bayraktar, Nihal & Moreno-Dodson, Blanca, 2010. "How can public spending help you grow? an empirical analysis for developing countries," Policy Research Working Paper Series 5367, The World Bank.

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