In recent years, a lot of rules concerning government expenditures as well as tax revenues were changed in Germany. Government expenditures in relation to GDP were reduced, income tax rates were lowered and the budget deficit declined. The structure of government expenditures changed in favor of...

In recent years, a lot of rules concerning government expenditures as well as tax revenues were changed in Germany. Government expenditures in relation to GDP were reduced, income tax rates were lowered and the budget deficit declined. The structure of government expenditures changed in favor of...

This paper reviews and summarizes the literature that has concentrated on budget consolidations and their fiscal and economic effects. The issue of fiscal adjustments has again gained importance due to the recent economic crisis and the resulting fiscal imbalances. The existing literature shows...