| Author (Person) | Pop, Valentina |
|---|---|
| Series Title | EUObserver |
| Series Details | 07.01.13 |
| Publication Date | 07/01/2013 |
| Content Type | News |
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EObserver reported that the International Monetary Fund's (IMF) top economists Olivier Blanchard and Daniel Leigh had drafted a special working paper on their own previous 'errors' in predicting the impact of austerity on European economies. The working paper was published in January 2013. The paper investigated the relation between growth forecast errors and planned fiscal consolidation during the crisis. The paper found, in advanced economies, stronger planned fiscal consolidation was associated with lower growth than expected, with the relation being particularly strong, both statistically and economically, early in the crisis. A natural interpretation is that fiscal multipliers were substantially higher than implicitly assumed by forecasters. The weaker relation in more recent years may reflect in part learning by forecasters and in part smaller multipliers than in the early years of the crisis. |
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| Source Link | http://euobserver.com/economic/118644 |
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| Subject Categories | Economic and Financial Affairs |
| Countries / Regions | Europe |
