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Pressure or Prudence? Tales of Market Pressure and Fiscal Adjustment, Salvatore Dell'Erba, Todd Mattina, Agustin Roitman

Abstract
We study whether multiyear fiscal adjustment plans in 17 OECD countries during 1980-2011 have been associated with market pressure. We find that only a third (34 percent) of the consolidations occurred under market pressure, suggesting that market pressure is important but not the main element associated with consolidation plans. Many adjustments under market pressure were also clustered around external shocks, and entailed larger median fiscal adjustments than other multiyear consolidations. In contrast, we find that virtually all multiyear consolidations aimed at reducing budget deficits occurred with initially weak macro-fiscal fundamentals
Table Of Contents
Cover; Contents; I. Introduction; II. Literature Review; Boxes; 1. Fiscal Plans versus Fiscal Outcomes: Identification and Measurement of Fiscal Policy; III. A Simple Model of Market Pressure and Fiscal Adjustment; A. Government's Problem; B. Implications of Default Risk; IV. Identification of Fiscal Adjustment and Measurement of Market Pressure; A. Identification of Fiscal Adjustments; B. Identification and Measurement of Market Pressure; 2. Measuring Market Pressure; V. Fiscal Adjustments under Pressure: The Big Picture; Figures
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (41 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781475526950

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