Will They Sing the Same Tune? Measuring Convergence in the New European System of Financial Supervisors |
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Author:
| Masciandaro, Donato Quintyn, Marc Nieto, Maria |
ISBN: | 978-1-282-84356-1 |
Publication Date: | Jan 2006 |
Publisher: | International Monetary Fund
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Book Format: | Ebook |
List Price: | USD $18.00 |
Book Description:
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This note argues that because fiscal deficit after a crisis owe much to a drop in tax revenues and a sluggish revenue growth, its adjustment has to rely more on revenue augmentation than commonly thought. Cutting extra spending in the wake of the crisis would not balance the book, while a natural growth of tax revenue after the recovery may take a long time before financing the pre-crisis level of expenditure. Faced with unpopular choices, the government may implicitly prefer seeing...
More DescriptionThis note argues that because fiscal deficit after a crisis owe much to a drop in tax revenues and a sluggish revenue growth, its adjustment has to rely more on revenue augmentation than commonly thought. Cutting extra spending in the wake of the crisis would not balance the book, while a natural growth of tax revenue after the recovery may take a long time before financing the pre-crisis level of expenditure. Faced with unpopular choices, the government may implicitly prefer seeing higher inflation.