The Composition of the Government Budget and the Dynamics of Public Debt
This paper investigates compositional effects on public-debt dynamics. Our contribution is twofold. First, we improve the methodology by taking explicit account of public-debt dynamics, eliminating a bias present in previous studies. Second, we estimate the evolution of debt dynamics induced by changes in the primary expenditure and revenue ratios - looking at all fiscal periods - not only consolidations as in the previous literature. Whilst we confirm that expenditure cuts are more important for debt reductions than are revenue increases, our findings contrast with the literature in that we obtain persistent debt-augmenting effects of tax reductions.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 63 (2007)
Issue (Month): 2 (June)
|Contact details of provider:|| Web page: https://www.mohr.de/fa|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
When requesting a correction, please mention this item's handle: RePEc:mhr:finarc:urn:sici:0015-2218(200706)63:2_244:tcotgb_2.0.tx_2-y. 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: (Thomas Wolpert)
If references are entirely missing, you can add them using this form.