The Resource Portugal - Assessing the Risks Around the Speed of Fiscal Consolidation in an Uncertain Environment, Stéphane Sorbe, (electronic resource)

Portugal - Assessing the Risks Around the Speed of Fiscal Consolidation in an Uncertain Environment, Stéphane Sorbe, (electronic resource)

Label
Portugal - Assessing the Risks Around the Speed of Fiscal Consolidation in an Uncertain Environment
Title
Portugal - Assessing the Risks Around the Speed of Fiscal Consolidation in an Uncertain Environment
Statement of responsibility
Stéphane Sorbe
Creator
Subject
Language
eng
Summary
This paper illustrates possible trade-offs between two different fiscal consolidation strategies in Portugal: sticking to the nominal fiscal targets in the EU-IMF programme or allowing automatic stabilisers to work, while sticking to the structural primary deficit targets implied by the programme. The analysis is based on stochastic simulations in which random shocks affect the main economic variables in the framework of a small macroeconomic model. The model captures the mutual interdependences between the fiscal position, financial conditions and activity and notably the impact of public debt developments on investors' confidence and interest rates. Results suggest that under the large fiscal consolidation programme that is currently implemented, both fiscal policy strategies considered would in most cases result in sustainable debt dynamics. Both strategies also entail risks, but of a different nature: the risk of a deeper recession if sticking to nominal targets and the risk of higher debt if letting automatic stabilisers play. Sensitivity analyses show that these risks could be reduced by stimulating potential growth through structural reform and by choosing "growth friendly" fiscal consolidation instruments that have lower multipliers. By reducing recessionary risks, a small fiscal multiplier also increases the relative benefits of sticking to nominal deficit targets, while the benefits of automatic stabilisers are larger if the multiplier is high. This Working Paper relates to the 2012 OECD Economic Survey of Portugal (www.oecd.org/eco/surveys/portugal)
Member of
Cataloging source
FR-PaOEC
http://library.link/vocab/creatorName
Sorbe, Stéphane
Government publication
international or intergovernmental publication
Index
no index present
Literary form
non fiction
Nature of contents
dictionaries
Series statement
OECD Economics Department Working Papers,
Series volume
no.984
http://library.link/vocab/subjectName
  • Economics
  • Portugal
  • Economics
  • Portugal
Label
Portugal - Assessing the Risks Around the Speed of Fiscal Consolidation in an Uncertain Environment, Stéphane Sorbe, (electronic resource)
Instantiates
Publication
Antecedent source
not applicable
Carrier category
online resource
Carrier category code
  • cr
Carrier MARC source
rdacarrier
Content category
text
Content type code
  • txt
Content type MARC source
rdacontent
Control code
815654829
Dimensions
21 x 30 cm
Extent
1 online resource 29 pages
File format
one file format
Form of item
online
Media category
computer
Media MARC source
rdamedia
Media type code
  • c
Other control number
10.1787/5k92smzp0b6h-en
Specific material designation
remote
System control number
(OCoLC)815654829
Label
Portugal - Assessing the Risks Around the Speed of Fiscal Consolidation in an Uncertain Environment, Stéphane Sorbe, (electronic resource)
Publication
Antecedent source
not applicable
Carrier category
online resource
Carrier category code
  • cr
Carrier MARC source
rdacarrier
Content category
text
Content type code
  • txt
Content type MARC source
rdacontent
Control code
815654829
Dimensions
21 x 30 cm
Extent
1 online resource 29 pages
File format
one file format
Form of item
online
Media category
computer
Media MARC source
rdamedia
Media type code
  • c
Other control number
10.1787/5k92smzp0b6h-en
Specific material designation
remote
System control number
(OCoLC)815654829

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