How to order
IMF Publications

Working Papers in full text
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 All


Other research-related activities and publications of the IMF can be found at IMF Research

Free Email Notification

Receive emails when we post new items of interest to you.

Subscribe or Modify your profile



Restoring Debt Sustainability After Crises: Implications for the Fiscal Mix

Author/Editor: Baldacci, Emanuele | Gupta, Sanjeev | Mulas-Granados, Carlos
Authorized for Distribution: October 1, 2010
Electronic Access: Free Full Text (PDF file size is 1,282KB)
Use the free Adobe Acrobat Reader to view this PDF file.
 
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: This paper analyzes the experience of 99 advanced and developing economies in restoring fiscal sustainability during 1980 - 2008 after banking crises, which led to large accumulation of public debt. It finds that successful debt reductions have relied chiefly on generation of large primary surpluses in post-crisis years through current expenditure cuts. These savings have been accompanied by growth-promoting measures and a supportive monetary policy stance. While these results are consistent with the existing literature, the paper finds that revenue-raising measures increased the likelihood of successful consolidation in countries that faced large adjustment needs after the crisis. This reflects the fall in effectiveness of spending cuts when deficit reduction needs are large independent of initial tax ratios.
 
Order a print copy
Series: Working Paper No. 10/232
Subject(s): Banking crisis | Debt consolidation | Debt reduction | Debt sustainability | Developed countries | Developing countries | Economic recovery | Financial crisis | Fiscal policy | Fiscal risk | Fiscal sustainability | Public debt | Revenue measures | Debt rescheduling
Author's keyword(s): Debt Sustainability | Fiscal Policy | Banking Crisis | Survival Analysis.
 
English  
    Published:   October 1, 2010        
            Format:   Paper
    Stock No:   WPIEA2010232   Pages:   35
    Price:   US$18.00 (Academic Rate: US$18.00 )
       
     
Please address any questions about this title to publications@imf.org.