Fiscal consolidations are currently in the agenda of fiscal authorities in many countries. Using Bayesian Model Averaging to overcome the problem of model uncertainty, we find that growth-enhancing policies and cuts in public wages are the most appropriate ingredients for successfully reducing...

This article describes some of the mechanisms by which oil price fluctuations produce changes in the long-run growth of the economy. The analysis suggests that a (permanent) increase in oil prices can significantly reduce potential output. From an economic policy point of view, this effect may...