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TitleAre there change-points in the likelihood of a fiscal consolidation ending?
Author(s)Agnello, Luca
Castro, Vítor
Sousa, Ricardo M.
KeywordsFiscal consolidations
Duration analysis
Weibull Model
Duration dependence
Issue date2012
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.
TypeWorking paper
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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