2013年-IMF国际货币组织全球_Fiscal_Consolidations_and_Growth_Does_Speed_Matter__25页_793kb

Summary of "Fiscal Consolidations and Growth: Does Speed Matter?"

Core Content

This working paper investigates whether the speed of fiscal consolidation affects fiscal multipliers and, consequently, economic growth. The authors explore the question of whether a faster consolidation leads to a larger impact on growth compared to a more gradual one, given a fixed size of fiscal retrenchment.

Main Viewpoints

• Speed and Multipliers: The paper finds that faster fiscal consolidations tend to have higher multipliers than gradual ones, suggesting that the pace of consolidation could be an important factor in determining its impact on growth.
• Empirical Methodology: The authors use a three-step approach to analyze the relationship between speed and fiscal multipliers:
  1. They modify a standard regression of growth on consolidation size to include an interaction term between speed and size.
  2. They construct a new dataset of multi-year consolidation episodes for 17 advanced economies over 1978–2009 using a narrative approach.
  3. They develop a novel index to measure the speed of fiscal consolidation.
• Theoretical Justification: The paper suggests that speed affects multipliers through several channels:
  • Composition Effects: Faster consolidations may target areas with higher multipliers (e.g., public investment) rather than less impactful areas.
  • Cyclical Asymmetries: Multipliers are larger during recessions, so slowing the pace of consolidation may help avoid entering a recession.
  • Anticipation Effects: If households expect future tax cuts, they may increase current consumption, thereby reducing the short-term multiplier. Conversely, if the consolidation is front-loaded, anticipation effects may be less pronounced.

Key Findings

• Empirical Evidence: Using a sample of 63 fiscal consolidation episodes, the authors find that fast consolidations are associated with higher multipliers.
• Quantitative Results: In the baseline regression (Table 2), the estimated multiplier for fast consolidations ranges from 0.2 to 1.8, while for gradual ones, it is lower.
• Robustness Checks: The results are robust to alternative samples, including a strict narrative approach and a statistical approach using the cyclically adjusted primary balance (CAPB).
• Confidence Intervals: The confidence intervals around the parameters are wide, indicating low precision in estimates due to the small sample size, but the sign of the speed effect is consistently negative (γ < 0), suggesting a strong qualitative relationship between speed and multipliers.

Key Information

• Sample Characteristics:
  • The sample includes 63 multi-year consolidation episodes.
  • The median consolidation involves cuts of around 2% of GDP, is 2 years long, and is more back-loaded than a steady pace.
  • The distribution of speeds is somewhat skewed, with around one-fifth of episodes having a speed between 0.3 and 0.7.
• Speed Index:
  • A novel speed index (E5) is developed, measuring the deviation from a steady pace of adjustment.
  • The index ranges from 0 (slowest, steady) to 1 (fastest, front-loaded or back-loaded).
• Robustness Tests:
  • The results are robust to the inclusion of time-varying growth trends.
  • Additional controls are tested, including composition effects, net exports, and monetary policy, but the paper acknowledges limitations in identifying causality due to the small sample size and lack of exogenous variation in speed.
• Policy Implications:
  • The paper provides preliminary support for consolidating at a steady pace rather than upfront, but acknowledges that front loading may be necessary in certain circumstances (e.g., when market access is limited or credibility of adjustment plans is low).
  • The findings should not be interpreted causally due to the potential endogeneity of speed and the limited sample size.

Methodology Highlights

• Equation (E1): A speed-augmented multiplier regression is used to estimate the impact of consolidation size and speed on GDP growth.
• Equation (E2): The fiscal multiplier is defined as the negative of the partial derivative of growth with respect to consolidation size, adjusted for speed.
• Speed Index (E5): The speed index measures the deviation from a steady pace, using a Gini-type coefficient to assess the timing of adjustments.

Limitations and Caveats

• Small Sample Size: The limited number of observations (63 episodes) restricts the precision of parameter estimates and limits the ability to identify mechanisms and test robustness.
• Non-Causal Interpretation: Due to the potential endogeneity of speed and the lack of exogenous variation, the results should not be interpreted as causal.
• Confidence Intervals: The confidence intervals around the speed coefficient (γ) and the size coefficient (β) are wide, indicating uncertainty in the quantitative estimates.

Conclusion

The paper concludes that while there is some preliminary evidence that faster fiscal consolidations may have higher multipliers, the results should be interpreted cautiously. The findings suggest that, under certain conditions, a steady pace of consolidation may be preferable, but front loading may still be necessary in cases where market access is constrained or adjustment plans lack credibility. Further research with larger and more varied samples is recommended to better understand the relationship between speed and fiscal multipliers.