IMF Working Papers

Effects of Fiscal Consolidation in the Czech Republic

By Stephen Snudden, Vladimir Klyuev

March 1, 2011

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Format: Chicago

Stephen Snudden, and Vladimir Klyuev. "Effects of Fiscal Consolidation in the Czech Republic", IMF Working Papers 2011, 065 (2011), accessed November 8, 2025, https://doi.org/10.5089/9781455228058.001

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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

This paper uses the IMF’s Global Integrated Monetary and Fiscal Model (GIMF) to assess the impact of fiscal consolidation on the Czech economy. Its contribution is threefold. First, it provides estimates of dynamic fiscal multipliers for a variety of fiscal instruments (tax and expenditure), consolidation durations, assumptions about credibility, and monetary policy responses. Second, the paper evaluates the impact on the economy of tightening measures envisaged in the 2011 budget. Third, the paper considers alternative packages for consolidation beyond 2011 to achieve the government’s balanced budget target by 2016 and identifies which forms of adjustment are more "growth-friendly".

Subject: Consumption taxes, Fiscal consolidation, Government consumption, Labor taxes, Public debt

Keywords: Aggregate demand, Consumption tax, Current account, Present value, WP

Publication Details

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