New Evidence on Fiscal Adjustment and Growth in Transition Economies

Author/Editor:

Sanjeev Gupta ; Alejandro Simone ; Alex Segura-Ubiergo

Publication Date:

October 1, 2006

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:

This paper analyzes the relationship between fiscal adjustment and real GDP growth in a panel of 26 transition economies during 1992-2001. Unlike most previous studies using cross-country regressions, the paper finds a positive and statistically significant relationship between fiscal adjustment and growth that is robust to different model specifications and estimation methods. The paper also presents country experiences to delve deeper into the mechanisms that may underlie this statistical relationship.

Series:

Working Paper No. 06/244

Subject:

Adjustment process Economic growth Economic stabilization Fiscal adjustment Fiscal policy Transition economies

English

Publication Date:

October 1, 2006

ISBN/ISSN:

9781451865042/1018-5941

Stock No:

WPIEA2006244

Format:

Paper

Pages:

33

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