Fiscal Deficit Reduction: An Evaluation of Alternatives
Abstract
In this paper we consider a number of alternative policies aimed at reducing the U.S. fiscal deficit over the course of the 1990s. We offer a quantitative evaluation of these policies that incorporates a number of usually overlooked aspects. One is the role of forward looking asset markets in the adjustment to a credible deficit reduction package. The second is the international impacts ofthe policy and how these spill overs effect the outcome in the United States through changes in exchange rates, trade and capital flows. Third, we explicitly deal with the supply side implications of the alternative proposals as well as the conventional effects on aggregate demand. As a starting point, we consider the Clinton program as announced in February 1993. We find that this program is a credible deficit reduction strategy which should have a short run stimulative effect on the economy in 1993 but during 1994and 1995 the program will tend to slow economic growth unless accompanied by some accommodating monetary policy by the Federal Reserve. Sustained benefits to the U.S. economy emerge by 1998.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.Bibliographic Info
Paper provided by Brookings Institution International Economics in its series Discussion Papers with number 101.Length:
Date of creation:
Date of revision:
Handle: RePEc:wop:briedp:101
Contact details of provider:
Postal: 1775 Massachusetts Ave NW, Washington DC 20036-2188
Email:
Web page: http://www.brook.edu/
More information through EDIRC
Related research
Keywords:Other versions of this item:
- McKibbin, W.J. & Bagnoli, P., 1993. "Fiscal Deficit Reduction: An Avaluation of Alternatives," Papers 100, Brookings Institution - Working Papers.
References
No references listed on IDEASYou can help add them by filling out this form.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Tuijl, M.A. van & Groof, R.J. de & Kolnaar, A.H.J.J., 1997. "Fiscal policy and public capital in interdependent economies," Open Access publications from Tilburg University urn:nbn:nl:ui:12-73833, Tilburg University.
- Tatsuji Hayakawa & Paul Zak, 2002. "Debt, Death and Taxes," International Tax and Public Finance, Springer, vol. 9(2), pages 157-173, March.
Lists
This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.Statistics
Access and download statisticsCorrections
When requesting a correction, please mention this item's handle: RePEc:wop:briedp:101For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
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.