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Abstract

With growth weakening in many parts of the world and downside risks on the rise, fiscal consolidation remains challenging. However, considerable progress has been made in strengthening fiscal accounts following their sharp deterioration in 2008-09. This issue of the Fiscal Monitor takes stock of this progress, focusing on its size, composition, and implications for employment and social equity. The issue finds that most countries--and especially advanced economies--have made significant headway in rolling back fiscal deficits, but that efforts at controlling debt stocks are taking longer to yield results. The mix of revenue and expenditure policies employed by countries with sizable fiscal consolidation needs has differed, with advanced economies in general relying more on spending retrenchment than emerging markets and low-income countries. Both spending and revenue measures have important implications for employment and social equity, the issue finds, and these implications need to be taken into account if the large consolidation efforts underway are to be sustainable.

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Taking Stock: A Progress Report on Fiscal Adjustment: Taking Stock: A Progress Report on Fiscal Adjustment
  • Abbas, A., E. Arbatli, B. Clements, M. Guerguil, R. de Mooij, L. Eyraud, M. Nozaki, V. Perry, and A. Weber, 2012, “What Do We Know about the Optimal Composition of Fiscal Adjustment in Advanced Economies?” (unpublished; Washington: International Monetary Fund).

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    • Export Citation
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    • Export Citation
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    • Export Citation
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    • Export Citation
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    • Search Google Scholar
    • Export Citation
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    • Export Citation
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    • Search Google Scholar
    • Export Citation
  • Baldacci, E., J. McHugh, and I. Petrova, 2011, “Measuring Fiscal Vulnerability and Fiscal Stress: A Proposed Set of Indicators,IMF Working Paper 11/94 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
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    • Search Google Scholar
    • Export Citation
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    • Export Citation
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    • Search Google Scholar
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    • Export Citation
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    • Export Citation
  • Bova, E., T. Kinda, J. Woo, and S. Zhang, 2012, “Distributional Consequences of Fiscal Consolidation and the Role of Fiscal Policy: What Do the Data Say?” (forthcoming; Washington: International Monetary Fund).

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    • Export Citation
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    • Export Citation
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    • Export Citation
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    • Export Citation
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    • Export Citation
  • Chetty, R., A. Guren, D. Manoli, and A. Weber, 2011, “Are Micro and Macro Labor Supply Elasticities Consistent? A Review of Evidence on the Intensive and Extensive Margins,American Economic Review, Vol. 101, No. 3, pp. 47175.

    • Search Google Scholar
    • Export Citation
  • Chu, K.-Y., H. Davoodi, and S. Gupta, 2004, “Income Distribution and Tax and Government Social-Spending Policies in Developing Countries,in Inequality, Growth, and Poverty in an Era of Liberalization and Globalization, ed. G. A. Cornia (New York: Oxford University Press).

    • Search Google Scholar
    • Export Citation
  • Coady, D., R. Gillingham, R. Ossowski, J. Piotrowski, S. Tareq, and J. Tyson, 2010, “Petroleum Product Subsidies: Costly, Inequitable, and Rising,IMF Staff Position Note 10/05 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Dao, M., and P. Loungani, 2010, “The Human Cost of Recessions: Assessing It, Reducing It,IMF Staff Position Note 10/17 (Washington: International Monetary Fund).

    • Search Google Scholar
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