Successful Fiscal Adjustments - Does Choice of Fiscal Instrument Matter?

The impact of product and labour market reform on growth: Evidence for OECD countries based on local projections

“…Although much better than the one‐size‐fits‐all approach, the narrative approach also has some problems (Holden & Larsson Midthjell, 2013). It might be hard to assess the true intention of a policy change solely by reading policy documents.…”

Impact of fiscal consolidation on economic growth: the Tunisian case

“…For instance, Ahrend et al (2006), Guichard et al (2007) and Alesina and Ardagna (2012) identify episodes of flexible duration. Most others, however, define periods of a fixed number of one or two, and sometimes three years during which the change of the CAPB exceeds a chosen number (Alesina and Perotti, JRF 23,5 1995;Alesina and Ardagna, 1998;Giavazzi et al, 2000;Ardagna, 2004;Kamps, 2006;Holden and Midthjell, 2013). Table 1 summarizes the different definitions of fiscal consolidation episodes used in the literature.…”

“…Measures of the change in the improvement of CAPB Alesina and Perotti (1995), Alesina and Ardagna (2010) The change is at least 1.5% of GDP in one year Alesina and Perotti (1997) The change is at least 1.5% of GDP in one year or at least 1.25% of GDP per year in both two consecutive years McDermott and Wescott (1996) The change is at least 1.5% of GDP over two years and does not decrease in either of these years Alesina and Ardagna (1998), Ardagna (2004), Holden and Midthjell (2013) The change is at least 2% of GDP in one year or at least 1.5% of GDP per year in both two consecutive years Giavazzi and Pagano (1996) The cumulative change is at least 5, 4 and 3% of GDP in respectively 4, 3, or 2 consecutive years, or 3% in one year Giavazzi et al (2000), Kamps (2006) The change is at least 1.5% of GDP per year over two consecutive years Afonso et al (2006) The change is above the average þ 2/3 times the standard deviation for all discretionally changes of budget balance in the entire sample Ahrend et al (2006), Guichard et al (2007) Definition 1: Starts if the change is at least 1% of potential GDP in one year or in two consecutive years with at least 0.5% in the first of the two Definition 2: Continues as long as the CAPB improves or deteriorates most 0.3% of GDP but is offset in the following year Definition 3: Terminates if the CAPB stops increasing or improves by less than 0.2% of GDP in one year and then deteriorates Giudice et al (2007) Definition 1: As in Alesina and Ardagna (1998) Definition 2: CAPB changes at least 3% of GDP over three consecutive years, and in each year the change cannot be lower than À0.5% of GDP Alesina and Ardagna (2012) The cumulative change is at least 2% of GDP in two consecutive years and at least 3% of GDP in three or more years with the improvement of each year Alesina and Ardagna (2013) Definition 1: a two-year period in which the CAPB improves in each year and the cumulative improvement is at least two points of the CAPB/GDP ratio Definition 2: a three-year or more period in which the CAPB improves in each year and the cumulative improvement is at least three percentage points Updates data of…”