Economists recommend to partly redistribute gains to losers from a structural reform, which in many cases may be … required for making the reform politically viable. However, taxation is distortionary. Then, it is unclear that compensatory … transfers can support a Pareto-improving reform. This paper provides sufficient conditions for this to occur, despite tax …

optimal timing of a reform depends on the relative importance of several conflicting effects, it seems clear that a reform … should be accompanied by an expansionary macroeconomic policy. This makes structural reform more problematic in the context …