Advanced Search
MyIDEAS: Login

Fiscal Consolidation in Israel

Contents:

Author Info

  • Natan P. Epstein
  • Selim Elekdag
  • Marialuz Moreno Badia

Abstract

Fiscal consolidation has become an important policy prescription for many emerging market countries (EMCs), particularly for the highly indebted ones. Although prudent fiscal policies tend to reduce vulnerabilities, their implementation is usually postponed. This paper represents, to the best of our knowledge, one of the first attempts in the literature to quantify the costs of delaying fiscal consolidation in an EMC. In particular, using the IMF''s Global Fiscal Model (GFM), we find that early consolidation through expenditure cuts would result in a substantial increase in Israel''s long-term output growth relative to the case with delayed fiscal adjustment. Using an alternative fiscal instrument, we find that delaying tax cuts would result in cumulative real GDP that is much larger than otherwise.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=19937
Download Restriction: no

Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/253.

as in new window
Length: 31
Date of creation: 01 Nov 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/253

Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Email:
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC

Order Information:
Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

Related research

Keywords: Fiscal consolidation; Fiscal reforms; Tax reductions; Government expenditures; Public debt; Gross domestic product; Economic growth; Emerging markets; Economic models; government debt; tax cuts; government deficit; fiscal policy; tax cut; public finances; government spending; current account; fiscal model; fiscal adjustment; debt stock; tax rates; expenditure cuts; fiscal balance; budget deficit; debt reduction; fiscal policies; budget constraint; stock of debt; debt ratio; fiscal deficit; fiscal deficits; debt servicing; public sector debt; taxation; current account surpluses; prudent fiscal policies; budget deficits; fiscal framework; public expenditure; fiscal discipline; government budget; fiscal performance; budget law; aggregate demand; fiscal surpluses; intergovernmental transfers; external debt; domestic creditors; fiscal outcomes; tax labor; external shocks; national debt; fiscal targets; budget expenditure; debt ratios; tax base; foreign currency debt; tax reduction; budget projections; fiscal surplus; fiscal imbalances; public spending; reserve bank; tax burden; tax revenues; fiscal consolidations; fiscal issues; government budget constraint; currency debt; tax reform; actual debt; fiscal savings; tax revenue; fiscal stimulus; public deficits; tax policy; medium-term fiscal framework; government deficits; government expenditure; fiscal space; current account balance; expenditure growth; fiscal instrument; government budget deficits; fiscal transparency; defense spending; debt management; annual budget;

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Blanchard, Olivier J, 1985. "Debt, Deficits, and Finite Horizons," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 223-47, April.
  2. Perotti, Roberto, 1998. " The Political Economy of Fiscal Consolidations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 367-94, March.
  3. International Monetary Fund, 2004. "Israel," IMF Staff Country Reports 04/112, International Monetary Fund.
  4. Weil, Philippe, 1989. "Overlapping families of infinitely-lived agents," Journal of Public Economics, Elsevier, vol. 38(2), pages 183-198, March.
  5. Alesina, A. & Drazen, A., 1991. "Why Are Stabilizations Delayed?," Papers 6-91, Tel Aviv - the Sackler Institute of Economic Studies.
  6. Douglas Laxton & Susanna Mursula & Michael Kumhof & Dirk Muir, 2010. "The Global Integrated Monetary and Fiscal Model (GIMF)," IMF Working Papers 10/34, International Monetary Fund.
  7. Dirk Muir & Douglas Laxton & Dennis P. J. Botman & Andrei Romanov, 2006. "A New-Open-Economy Macro Model for Fiscal Policy Evaluation," IMF Working Papers 06/45, International Monetary Fund.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Steven A. Symansky & Xavier Debrun & Natan P. Epstein, 2008. "A New Fiscal Rule," IMF Working Papers 08/87, International Monetary Fund.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:06/253. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.