The composition of the government budget and the dynamics of public debt

Walpurga Köhler-Töglhofer, Martin Zagler

Risultato della ricerca: Contributo su rivistaArticolo in rivistapeer review

Abstract

This paper investigates compositional effects on public-debt dynamics. Our contribution is twofold. First, we improve the methodology by taking explicit account of public-debt dynamics, eliminating a bias present in previous studies. Second, we estimate the evolution of debt dynamics induced by changes in the primary expenditure and revenue ratios - looking at all fiscal periods - not only consolidations as in the previous literature. Whilst we confirm that expenditure cuts are more important for debt reductions than are revenue increases, our findings contrast with the literature in that we obtain persistent debt-augmenting effects of tax reductions.

Lingua originaleInglese
pagine (da-a)244-263
Numero di pagine20
RivistaFinanzArchiv
Volume63
Numero di pubblicazione2
DOI
Stato di pubblicazionePubblicato - giu 2007
Pubblicato esternamente

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