The National and Global Impacts of Fiscal Deficit Consolidation

DOI

10.2991/aebmr.k.220307.064How to use a DOI?

Keywords

Government Deficit; Fiscal Policy; COVID-19 Pandemic

Abstract

The US government deficit increased in relation to the fiscal responses which were designed to protect people and facilitate recovery. It has been forecasted that the government debt will rise to 160 percent of GDP or even higher by 2030. In response to the high debt, states are planning for deficit reduction strategies. However, there has been a debate on if the United States need fiscal consolidation and if the consolidation should be done through increasing taxation or reducing government spending. This paper uses the G-Cubed model to simulate the national and global implications of a permanent reduction in the fiscal deficit which is caused by a reduction in the government spending of 1% GDP. The results show that the fiscal consolidation strategies have different implications depending on which country undertakes the policy and how quick the country implemented the policy.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Jiaxin Zhang
PY  - 2022
DA  - 2022/03/26
TI  - The National and Global Impacts of Fiscal Deficit Consolidation
BT  - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
PB  - Atlantis Press
SP  - 405
EP  - 410
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220307.064
DO  - 10.2991/aebmr.k.220307.064
ID  - Zhang2022
ER  -