Federal Reserve Bank of Kansas City
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Kansas City, MO
Institutional Affiliation: Federal Reserve Bank of Kansas City
Information about this author at RePEc
NBER Working Papers and Publications
|February 2012||Uncertain Fiscal Consolidations|
with Eric M. Leeper, Campbell B. Leith: w17844
The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition are uncertain. Drawing on the evidence in Alesina and Ardagna (2010), we emphasize whether or not the fiscal consolidation is driven by tax rises or expenditure cuts. We find that the composition of the fiscal consolidation, its duration, the monetary policy stance, the level of government debt and expectations over the likelihood and composition of fiscal consolidations all matter in determining the extent to which a given consolidation is expansionary and/or successful in stabilizing government debt.
Published: Huixin Bi & Eric M. Leeper & Campbell Leith, 2013. "Uncertain Fiscal Consolidations," Economic Journal, Royal Economic Society, vol. 0, pages F31-F63, 02. citation courtesy of
|March 2010||Sovereign Debt Risk Premia and Fiscal Policy in Sweden|
with Eric M. Leeper: w15810
This paper takes a step toward providing a general equilibrium framework within which to study the nub of the current fiscal debate around the world: what are the tradeoffs between short-run stabilization and long-run sustainability when the perceived riskiness of government debt depends, in part, on the current and expected fiscal environment in place? We calibrate a simple model to Swedish fiscal data in two periods: before and after the financial crisis of the early 1990s. We compute the dynamic fiscal limit, which depends on the peak of the Laffer curve, for the pre-crisis and three alternative post-crisis fiscal policies. The model simulates the macroeconomic consequences of alternative policies in the face of the sequence of bad output shocks that Sweden experienced from 1991-1997.
Published: “Sovereign Debt Risk Premia and Fiscal Policy in Sweden,” Swedish Economic Policy Review, 2010 (with Huixin Bi)