Series: IMF Working Papers
Author(s): Douglas Laxton , Susanna Mursula , Kevin Clinton , and Michael Kumhof
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 July 2010
Keywords: current account imbalances, tax reform, income taxes, consumption taxes, Open Economy Macroeconomics, International Policy Coordination and Transmission, Fiscal Policies and Behavior of Economic Agents: General,
The paper evaluates the costs and benefits of fiscal consolidation using simulations based on the IMFs global DSGE model GIMF. Over the longer run, well-targeted permanent reductions in budget deficits lead to a co...