{
  "title": "The Effects of Fiscal Consolidations on the Debt Distribution",
  "publication": "IMF Working Papers, October 3, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2025/10/03/the-effects-of-fiscal-consolidations-on-the-debt-distribution-570919",
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  "summary": "This paper estimates the effects of fiscal expenditure consolidations on the entire distribution of public debt-to-GDP for an unbalanced sample of 192 countries over the period 1991-2021.",
  "sections": [
    {
      "heading": "Study scope and methodology",
      "content": "- Authors: Francesco Frangiamore, Davide Furceri, Domenico Giannone, Faizaan Kisat, Pietro Pizzuto\n- Date: October 3, 2025\n- Sample: an unbalanced sample of 192 countries over the period 1991-2021\n- Methods: panel location-scale models to estimate effects of fiscal expenditure consolidations on the entire distribution of public debt-to-GDP"
    },
    {
      "heading": "Key findings on debt levels and distribution",
      "content": "- Government expenditure cuts significantly lower the location (average) of the future debt-to-GDP distribution.\n- Government expenditure cuts significantly lower the scale (variance) of the future debt-to-GDP distribution, implying a reduction in the uncertainty surrounding public debt.\n- There is a downward sloping trend in the effects of government expenditure consolidations across the quantiles of the debt-to-GDP distribution.\n- The largest reductions occur on the right tail of the debt-to-GDP distribution, defined as debt-at-risk."
    },
    {
      "heading": "Persistence and horizons",
      "content": "- The effects of government expenditure consolidations persist up to a 4-year forecast horizon."
    },
    {
      "heading": "Heterogeneity and conditional effectiveness",
      "content": "- Fiscal expenditure consolidations are more effective in reducing debt-to-GDP when the debt levels are higher.\n- Fiscal expenditure consolidations are more effective in reducing debt-to-GDP when countries adopt a fiscal rule.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/10/03/the-effects-of-fiscal-consolidations-on-the-debt-distribution-570919"
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    "Authors: Francesco Frangiamore, Davide Furceri, Domenico Giannone, Faizaan Kisat, Pietro Pizzuto",
    "Published: October 3, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229025331.001",
    "Authors: Francesco Frangiamore, Davide Furceri, Domenico Giannone, Faizaan Kisat, Pietro Pizzuto",
    "Date: October 3, 2025",
    "Sample: an unbalanced sample of 192 countries over the period 1991-2021",
    "Methods: panel location-scale models to estimate effects of fiscal expenditure consolidations on the entire distribution of public debt-to-GDP",
    "Government expenditure cuts significantly lower the location (average) of the future debt-to-GDP distribution.",
    "Government expenditure cuts significantly lower the scale (variance) of the future debt-to-GDP distribution, implying a reduction in the uncertainty surrounding public debt.",
    "There is a downward sloping trend in the effects of government expenditure consolidations across the quantiles of the debt-to-GDP distribution.",
    "The largest reductions occur on the right tail of the debt-to-GDP distribution, defined as debt-at-risk.",
    "The effects of government expenditure consolidations persist up to a 4-year forecast horizon.",
    "Fiscal expenditure consolidations are more effective in reducing debt-to-GDP when the debt levels are higher.",
    "Fiscal expenditure consolidations are more effective in reducing debt-to-GDP when countries adopt a fiscal rule.",
    "**Working Paper**"
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