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Europe > Ireland

You are looking at 1 - 3 of 3 items for :

  • Type: Journal Issue x
  • National Budget, Deficit, and Debt: General x
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Cover IMF Working Papers
Playing by the Rules: Reforming Fiscal Governance in Europe
Luc Eyraud
and
Mr. Tao Wu
The paper contributes to the discussions on fiscal governance in Europe. It takes stock of recent reforms, identifies areas for further progress, and discusses a menu of policy options for the medium-term. The issues covered include: (i) the growing complexity of the European framework and ways to simplify it; (ii) the difficulties to measure and implement structural stance indicators; (iii) the challenge of reconciling fiscal sustainability and growth; (iv) the need to enhance coordination in the area of monitoring; and (v) the obstacles to compliance and proposals to strengthen enforcement.
Keywords:
WP; debt ceiling; potential GDP; debt ratio; federal government; member country; Fiscal Policy; Fiscal Rules; EMU; interest rate; central government; output gap measurement error; deficit rule; debt level; debt rule; government ability; debt increase; euro area country; output gap data; Fiscal stance; Fiscal governance; Europe
Cover IMF Working Papers
Fiscal Consolidations and Growth: Does Speed Matter?
Steven Pennings
and
Mrs. Esther Perez Ruiz
Should fiscal consolidations be front-loaded or proceed at a more steady pace, and how does this affect growth? We make an attempt to address this question using a three-step methodology. First, we modify a standard regression of growth on consolidation size to allow speed to affect the multiplier. Second, using the narrative dataset of Devries and others (2011), we construct a new sample of multi-year consolidation episodes for 17 advanced economies over 1978-2009. Third, we develop a novel concept of speed to measure the pace of the consolidation episodes identified in the data. The main empirical finding is that fast episodes have higher multipliers than gradual consolidations. This provides some preliminary support for consolidating at a steady pace, market access and a credible adjustment plan permitting. However, as the sample size is small, identifying mechanisms and testing robustness is difficult, and so our findings should not be interpreted causally.
Keywords:
WP; exchange rate; control variable; multiplier regression; Fiscal policy; fiscal multipliers; government expenditure; anticipation effects; multiplier estimate; multiplier equation; consolidation episode; run multiplier; Fiscal consolidation; Exchange rate arrangements; Central bank policy rate; Global
Cover IMF Working Papers
Fiscal Consolidation and the Cost of Credit: Evidence from Syndicated Loans
Ms. Senay Agca
and
Ms. Deniz O Igan
We examine how the cost of corporate credit varies around fiscal consolidations aimed at reducing government debt. Using a new dataset on fiscal consolidations and syndicated corporate loan data, we find that loan spreads increase with fiscal consolidations, especially for small firms, domestic firms, and for firms with limited alternative financing sources. These adverse effects are mitigated substantially if consolidations are large, and can be avoided if consolidations are also accompanied with more adaptable macroeconomic policies and implemented by a stable government. These findings suggest that lenders price the short-term recessionary effects in loans but large consolidations can reduce or undo the increase in spreads, especially under favorable country conditions, by signaling credibility and creating expansionary expectations.
Keywords:
WP; real GDP; credit rating; economic activity; external finance; monetary policy; fiscal consolidation; sovereign debt; cost of credit; loan spreads; firm variable; growth opportunity; Worldscope firm; small firm; loan spread; domestic firm; Loans; Syndicated loans; Credit; Global