| Authors |
Adam, A., Hatzipanayotou, P. and Moutos, T. |
| Title |
Labour Market Regulation, Fiscal Consolidation, and the Success of Current Account Adjustments |
| Abstract |
In this paper we argue that the strictness of labour market regulations can interact with the mode of fiscal consolidation (tax- based versus spending-based fiscal adjustments) to affect whether current account adjustments are successful. Using data from 81 countries, we are able to identify 147 episodes of current account adjustments, of which 69 are classified as successful. On the basis of a discrete choice cross- sectional time- series model we find that the co-existence of tax-based fiscal consolidations and strict labour market regulations reduces significantly the probability of successful current account adjustments. |
| Creation Date |
2015-10-29 |
| Keywords |
Current account adjustment, labour market regulations, fiscal consolidation |
| Classification JEL |
E62, F32, F41 |
| File |
Labour.Market.Regulation.pdf (502986 bytes) |
| File-Function |
First version |
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