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- W2100142490 abstract "Over the past two years governments in OECD countries have had to ask themselves how they are to deal with the fiscal consequences of the financial crisis. Output fell dramatically, as is discussed in Barrell and Kirby in this Review, with some of the fall being a change in the level of trend output. There is however a significant output gap, and a case can be made for the government taking action to speed the process of market-based adjustment and help close the gap by stimulating demand. If there are other policy priorities then it is necessary to evaluate actions both in terms of these priorities and their impact on demand and output in the short term. When we consider issues around fiscal consolidation we have to consider how much of the rise in deficits we have seen is cyclical, and how much is structural. In addition we have to ask to what extent the structural changes may require a slimmer state. We first look at the case for reducing government borrowing, and then at trends in spending and tax receipts. We distinguish between decisions taken to produce a slimmer sate and those that would rebalance the budget. In any decision making politicians have to balance short-term costs of their actions against long-term benefit. Such cost–benefit analyses are a normal part of the economist’s toolkit." @default.
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- W2100142490 date "2011-01-01" @default.
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- W2100142490 title "Fiscal Consolidation and the Slimmer State" @default.
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- W2100142490 doi "https://doi.org/10.1177/0027950111401132" @default.
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