Working Paper
Fiscal stabilization and the credibility of the U.S. budget sequestration spending austerity
Hu, Ruiyang; Zarazaga, Carlos E. (2016-12-01)
Fiscal imbalances predating the Great Recession but aggravated by it prompted the U.S. Congress to enact in 2011 legislation that, in the absence of other measures, would trigger two years later a so-called ?budget sequestration? procedure that implied reducing government discretionary spending to unprecedented low levels over the following decade. For that reason, economic agents may not have expected this ?fiscal stabilization measure of last resort? to be sustainable when it was put into effect in 2013 as scheduled. This is exactly the issue this paper set out to explore, on the grounds ...
Working Papers , Paper 1616