A New Action-Based Dataset of Fiscal Consolidation

By Andrea Pescatori, D. Leigh, Jaime Guajardo, Peter DeVries. Social Science Research Network, 2011

409 citations recorded by the source corpus.

This paper presents a new dataset of fiscal consolidation for 17 OECD economies during 1978-2009. We focus on discretionary changes in taxes and government spending primarily motivated by a desire to reduce the budget deficit and not by a response to prospective economic conditions. To identify the motivation and budgetary impact of the fiscal policy changes, we examine contemporaneous policy documents, including Budgets, Budget Speeches, central bank reports, Convergence and Stability Programs submitted by the authorities to the European Commission, and IMF and OECD reports. The resulting series can be used to estimate the macroeconomic effects of fiscal consolidation.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/a5012136625fff0522aca8177df19d761938b17a

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Citations in the corpus

The Design of Fiscal Adjustments (2013, positive): “The IMF “Narrative” Method In this section, we perform the same analysis to the outcome-based definition of Devries et al. (2011).We find results that are remarkably similar”
Fiscal consolidation with tax evasion and corruption (2014, methodology): “In order to check whether the results we obtain are due to the particular methodology of BL (2013), we perform a different exercise using the narrative fiscal consolidation episodes identified by Devries et al. (2011) for a group of OECD countries.”
Fiscal Policy and the Current Account (2011, background): “For further Discussion Papers by this author see: www.cepr.org/pubs/new-dps/dplist.asp?authorid=119068”
Fiscal Stimulus and Fiscal Sustainability (2017, methodology): “To explore the robustness of our results, we also employ fiscal consolidation shocks constructed by Devries et al. (2011) and updated by Alesina et al. (2016).”
Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009 (2011, methodology): “Overall, Devries et al. (2011) find 173 periods of fiscal policy adjustment, As a first pass at the data, we repeat the exercise in Figure 1 for output growth (Figure 4).”
Revisiting the Twin Deficits Hypothesis: The Effect of Fiscal Consolidation on the Current Account (2011, methodology): “For example, in Finland in 2000, there was an asset price boom and rapid domestic demand growth, and the government cut spending to reduce the risk of economic overheating (Devries et al., 2011, p. 31).”
Distributional Consequences of Fiscal Consolidation and the Role of Fiscal Policy: What Do the Data Say? (2013, methodology): “To do this, we first classified all the consolidation episodes from Devries et al. (2011) into three categories according to the magnitude of inequality changes after the consolidation (bottom 1/3 percentile, middle 1/3 percentile, and top 1/3 percentile), and then picked two largest spending-based ”
The Effects of Fiscal Consolidations: Theory and Evidence (2017, methodology): “This implies that monetary policy does not explain – at least not entirely – the observed heterogeneity in output effect, contrary to what argued by Guajardo et al. (2014). Further evidence on the aggregate version of this dataset in Alesina et al.”