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Abstract
We measure the success of fiscal consolidation, with alternative definitions, based on ad-hoc quantitative approaches and on a policy-action approach. The cyclically adjusted primary balance, and the duration of the consolidation contribute for its success, and the opposite applies for revenue-based consolidations.
Notes
1 Further details can be found in Devries et al. (Citation2011).
2 The data are from the AMECO European Commission database: net lending (+) or net borrowing (-) excluding interest of general government adjusted for the cyclical component. Adjustment based on potential GDP (% of GDP at market prices), codes 1.0.319.0.UBLGBP; total expenditure: general government (% of GDP at market prices), codes 1.0.319.0.UUTGF, 1.0.319.0.UUTGE; total revenue: general government, (% of GDP at market prices), codes 1.0.319.0.URTGF, 1.0.319.0.URTGE; general government consolidated gross debt (based on ESA 1995) and former definition (linked series) (% of GDP at market prices) codes 1.0.319.0.UDGGF, 1.0.319.0.UDGGL.
3 Scatter-plots are available from the authors upon request.
4 Only the results for the FE3 approach are displayed since the other approaches yielded similar results.