Fiscal consolidation is one of the most commonly used instruments of fiscal policy in order to "recover" the economy of a country. Successful implementation of the fiscal consolidation plan leads to a reduction of the budget deficit and public debt, with expansive effects primarily related to GDP growth. However, the success of fiscal consolidation does not depend only on a good plan or precise strategy. The complexity of fiscal consolidation requires knowledge of the entire macroeconomic system. The aim of this paper is to, based on previous experience, define the conditions which determine successful fiscal consolidation. Also, the paper will emphasize the most common mistakes which prevent consolidation from going in the desired direction. It should be mentioned that there is no unique fiscal policy and that each country has the opportunity to formulate a fiscal consolidation strategy based on its predispositions, expecting to bring the best results.
Alesina A, Azzalini G, Favero C, Giavazzi F, Miano A. Is it the ``How’’ or the ``When’’ that Matters in Fiscal Adjustments?First presented at the 2016 IMF-ARC conference. We thank two anonymous referees, the editor Linda Tesar, and especially our discussant, Chris Erceg, for his very useful comments. We than. 2017;52.
4.
Alesina A, Barbiero O, Favero C, Giavazzi F, Paradisi M. 2017;
5.
Bosworth B. The Role of Expenditure Reform in Fiscal Consolidations. Paper Prepared for IMF Fiscal Forum. 2010;1–21.
6.
Ecb. Fiscal consolidation: past experience, cost and benefits. 2010;(44):4493–4.
7.
Heylen F, Everaert G. Success and Failure of Fiscal Consolidation in the OECD : A Multivariate Analysis multivariate analysis. Public Choise. 2015;
8.
Leigh D, Devries P, Freedman C, Guajardo J, Lexton D, Pescatori A. Will It Hurt? Macroeconomic Effects of Fiscal Consolidation. IMF World Economic Outlook. 2010;93–124.
9.
Agnello L. What determines the duration of a fiscal consolidation program? 2013;113–34.
10.
Philippopoulos A, Varthalitis P, Vassilatos V. Fiscal consolidation in an open economy with sovereign premia and without monetary policy independence. International Journal of Central Banking. 2016;
11.
Rother P, Schuknecht L, Stark J. The benefits of fiscal consolidation in uncharted waters. 2010;1–37.
12.
Tsibouris G, Horton M, Flanagan M, Maliszewski W. Experience with large fiscal adjustments. IMF Occasional Papers. 2006;1–46.
13.
Are Budget Rigidities a Source of Fiscal Distress and a Constraint for Fiscal Consolidation ? 2019;
14.
Yang W, Fidrmuc J, Ghosh S. Macroeconomic effects of fiscal adjustment: A tale of two approaches. Journal of International Money and Finance. 2015;31–60.
The statements, opinions and data contained in the journal are solely those of the individual authors and contributors and not of the publisher and the editor(s). We stay neutral with regard to jurisdictional claims in published maps and institutional affiliations.
