The 2005 reform of the EU Stability and Growth Pact has provided leeway for governments to let
their fiscal deficit temporarily breach the 3% rule to finance the immediate budgetary cost of structural
reform, such as compensation schemes to offset redistributive effects. Against this backdrop, it is useful to
dispose of empirical estimates of the effect of structural reform on fiscal outcomes, not only the short term
cost but also the long-run fiscal gain stemming from changes in spending parameters and better economic
performance. Based on econometric estimates for a pool of 21 OECD countries, this study finds a
significant net fiscal gain of structural reform.
Short-Term Pain for Long-Term Gain
The Impact of Structural Reform on Fiscal of Outcomes in EMU
Working paper
OECD Economics Department Working Papers
Share
Facebook
Twitter
LinkedIn
Abstract
In the same series
-
Working paper20 September 2024
-
5 September 2024
-
5 September 2024
Related publications
-
Working paper20 September 2024