Ardanaz, Martin; Cavallo, Eduardo A.; Izquierdo, Alejandro - 2021
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 …
