Effects of Fiscal Consolidation in the Czech Republic
March 1, 2011
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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
Pages:
65
Volume:
2011
DOI:
Issue:
065
Series:
Working Paper No. 2011/065
Stock No:
WPIEA2011065
ISBN:
9781455228058
ISSN:
1018-5941
