What Sustains Fiscal Consolidations in Emerging Market Countries?
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Summary:
This paper examines the factors affecting the persistence of fiscal consolidation in 25 emerging market countries during 1980-2001. It proposes a new approach for defining spells of fiscal consolidation. The results indicate that the probability of ending a fiscal adjustment is affected by the legacy of previous fiscal failures, the size of the deficit, the composition of spending, and level of total revenues. There is also some evidence that the initial debt stock, exchange rate developments, inflation, and the unemployment rate have an impact on the persistence of adjustments.
Series:
Working Paper No. 2003/224
Subject:
Asset and liability management Debt reduction Fiscal consolidation Fiscal policy Government debt management Public debt Public financial management (PFM)
English
Publication Date:
November 1, 2003
ISBN/ISSN:
9781451875348/1018-5941
Stock No:
WPIEA2242003
Pages:
27
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