debt above 60 percent or deficits above 3 percent of GDP. We find that the proposed framework would require ambitious … fiscal adjustment: on average, more than 2 percent of GDP over the medium term, in addition to the adjustment that is already … framework. We also find that for most countries with debt above 60 percent of GDP, these adjustment requirements are driven by …

. The pre-crisis declines in CESEE debt/GDP ratios were largely the consequence of a very favourable relationship between …

time. When public investment is penalized relative to public consumption and thus, its share in public expenditures … decreases, a 1 percent of GDP consolidation reduces output by 0.7 percent within three years of the fiscal shock. In contrast … adjustments on impact, and can even spur output growth over the medium term. The component of GDP that mostly drives the …