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|Title:||Are there change-points in the likelihood of a fiscal consolidation ending?|
Sousa, Ricardo M.
|Abstract(s):||Building on a narrative approach to identify episodes of fiscal consolidation, data for a group of 17 industrial countries over the period 1978-2009 and both continuous-time and discrete-time duration models, we find evidence suggesting that likelihood of a fiscal consolidation ending increases over time, but only for programs that last less than six years. Additionally, fiscal consolidations tend to last longer in non-European than in European countries. Our results emphasize that chronic fiscal imbalances might lead to a vicious austerity cycle, while discipline in the behavior of fiscal authorities is a means of achieving credible and shorter adjustment measures.|
|Appears in Collections:||NIPE - Documentos de Trabalho|
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|NIPE_WP_18_2012.pdf||Documento principal||468,92 kB||Adobe PDF||View/Open|