01879cas a2200253 a 4500 AALejournalIMF015076 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498393577 1018-5941 BD-DhAAL BD-DhAAL Fletcher, Kevin. How Delaying Fiscal Consolidation Affects the Present Value of GDP / Kevin Fletcher, Damiano Sandri. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (31 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We develop a simple model to examine the conditions under which delaying fiscal consolidation can affect the present value of GDP via the fiscal stance's effects on the output gap and hysteresis. We find that the absolute size of the fiscal multiplier-the focus of much empirical investigation and policy debate-is likely inconsequential in this regard. Rather, what matters is the degree to which the multiplier during the initial period of fiscal stimulus differs from the multiplier when the stimulus is withdrawn. If the multiplier is constant over time, delaying consolidation is unlikely to significantly boost the present value of GDP via effects on the output gap and hysteresis. The potential success of such efforts relies instead on exploiting time-variation in multipliers. Mode of access: Internet Sandri, Damiano. IMF Working Papers; Working Paper ; No. 2015/052 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/052/001.2015.issue-052-en.xml IMF e-Library