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Fiscal Adjustments (Alesina)

Fiscal adjustments: lessons from recent history by Alberto Alesina. In this report Alesina commeted that the fiscal adjustments, even large ones, which reduce budget deficits, can be successful in reducing relatively quickly debt over GDP ratios without causing recessions. Fiscal adjustments based upon spending cuts are those with, by far, the highest change of success. Fiscal adjustments do not need to have large social cost if they are accompanied by welfare reforms when needed. http://bit.ly/aq7e0o

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