Fiscal Adjustment in Transition Countries: Evidence From the 1990's

Author/Editor:

Catriona Purfield

Publication Date:

February 1, 2003

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

In the 1990s, transition countries underwent large adjustments to address fiscal imbalances. This paper examines whether the factors identified in the literature on advanced economies, the size and composition of adjustment, are important in transition economies. It finds that larger consolidations were more successful in addressing fiscal imbalances on a durable basis. Policies focusing on expenditure reductions were more successful than those relying on revenue increases. There is little evidence of expansionary fiscal contractions, but fiscal contractions did not have a significantly negative impact on growth either. Few fiscal stimuli succeeded in boosting growth.

Series:

Working Paper No. 2003/036

Subject:

English

Publication Date:

February 1, 2003

ISBN/ISSN:

9781451845471/1018-5941

Stock No:

WPIEA0362003

Pages:

22

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