Effects of fiscal consolidations in Latin America

Resumo

We use new data on cyclically adjusted primary balances for Latin America and the Caribbean to estimate e ects of scal consolidations on GDP and some of its components. Identi cation is conducted through a doubly-robust estimation procedure that controls for non-randomness in the 'treatment assignment' by inverse probability weighting and impulse responses are generated by local projections. Results suggest output contraction by more than one percent on impact, with economy starting to recover from the second year on. Composition e ects indicate that revenue-based adjustments are way more contractionary than expenditure-based ones. Disentangling efects between demand components, we nd consumption being in general less responsive to consolidations than investment, although nonlinearities associated to initial levels of debt and taxation might play an important role.

Ficha do documento

Tipo

Estudo

Ano

2016

Instituição

Escola de Economia de São Paulo

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso aberto

Identificador

oai:repositorio.fgv.br:10438/16624

Temas

EconomiaFinanças Públicas

Palavras-chave

Fiscal adjustmentStructural balanceLatin AmericaFiscal policyEconomiaPolítica tributária - América LatinaDivida publica - América LatinaPolítica monetária - América Latina