ECB paper explores fiscal adjustment in stressed countries
Fiscal corrections have been ‘more costly’ in contractionary times
A working paper published this month by the European Central Bank (ECB) analyses the behaviour of four European countries that have typically followed a "spend-and-tax" model of fiscal adjustment.
Fiscal policy adjustments in the euro area stressed countries: new evidence from non-linear models with state-varying thresholds, by Roberto A. De Santis, Gabriella Legrenzi and Costas Milas, uses a non-linear model to study "the adjustment of fiscal variables" in Greece, Ireland, Portugal and Spain
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