Perverse Fiscal Consolidation
Sottotitolo:
In the last three years the IMF has revised upwards the size of fiscal multipliers. This has devastating implications: if the fiscal multiplier is greater than the inverse of the Public Debt/GDP ratio, fiscal consolidation necessarily raises instead of lowering the Public Debt/GDP ratio with respect to what it would have been without consolidation. This appears to be the case for all or nearly all of advanced countries. |