**Table A0: Literature review (continuation)**

|**Paper**|**Fiscal Adjustment**|**Succesful fiscal adjustment**|**Multivariate analysis?**|**Sample**|
|---|---|---|---|---|
|Tavares<br>(2004)|The change in the primary deficit<br>is -1.5% of GDP or less.|If the total change in the primary deficit in the 3 years<br>after the adjustment is -1% (or less) of GDP or, 3 years<br>after the initial adjustment year, the debt-to-GDP ratio<br>is 5% below its level before the adjustment.|Probit model . Only<br>adjustment periods<br>considered.|19 (OECD),<br>1960-95|
|Ardagna<br>(2004)|The CAPB must increase by at<br>least 1.5% of potential GDP over<br>two years and not decrease.|A succesful fiscal stabilization is an episode in which the<br>CAPB improves, and, 2 years after, the debt-to-GDP<br>ratio is at least 3% lower than in the year of the fiscal<br>tightening.|<br>Probit model, but<br>sample also includes<br>years without<br>adjustment.|17 (OECD),<br>1975-02|
|Ahrend et al.<br>(2006)|<br>CAPB increases by at least 1% of<br>GDP in one year or over two<br>consecutive years with at least<br>0.5% in the first year.|Classified as seriously pursued if in the two years<br>following the adjustment an additional adjustment of at<br>least 1% of GDP is achieved. Success based on the<br>cumulative adjustment.|<br>Probit and FE estimator<br>using cumulative CAPB<br>changes.|<br>24 (OECD),<br>1980-05|
|Tsibouris et<br>al. (2006)|Any year or succession of years of<br>uninterrupted improvement in<br>the fiscal primary balance.|Episodes in which reversals over the first three post-<br>adjustment years were less than 1/5 of the total<br>adjustment.|Case studies and<br>success rates.|165, 1971-01|
|Guichard et<br>al. (2007)|Starts if the CAPB improves by at<br>least 1% of potential GDP in one<br>year or in two consecutive years<br>with at least 0.5% improvement<br>occuring in the first of the two<br>years. Contines as long as CAPB<br>improves allowing deterioration<br>of no more than 0.3% in one year<br>offset by 0.5% improvement next<br>year and stop when CAPB stops<br>increasing or improves less than<br>0.2% of GDP in one year and then<br>deteriorates.|NA.|Probit.|24 (OECD),<br>1978-05|
|Miearau et<br>al. (2007)|1) An improvement of the CAPB<br>by 1.25% points in two<br>consecutive years or an<br>improvement of 1.5% points of<br>the budget balance preceded by a<br>positive change in the budgetary<br>position. 2) Any period starting<br>with an improvement of the<br>budget balance by at least 0.25%<br>in the first year, with a minimum<br>duration of 2 years and a total<br>improvement of 2%.|NA.|Conditional FE logit.|20 (OECD),<br>1970-03|
|Schaltegger<br>and Feld<br>(2009)|<br>A period of fiscal adjustment is<br>defined as a year in which the<br>(cantonal and local) primary<br>balance per GDP improves by at<br>least 1%, or a period of two<br>consecutive years in which the<br>primary balance improves by at<br>least 0.8%, in both years.|A period of fiscal adjustment is succesful if, in the three<br>years after adjustment, the (cantonal and local) primary<br>balance improved on average by at least 0.5%.|<br>Probit model, but<br>sample also includes<br>years without<br>adjustment.|Swiss<br>cantons, 1981-<br>01|
|Alesina and<br>Ardagna<br>(2010)|<br>A period of fiscal adjustment<br>(stimulus) is a year in which the<br>CAPB improves (deteriorates) by<br>at least 1.5% of GDP.|If the cumulative reduction of the debt-to-GDP ratio 3<br>years after the beginning of a fiscal adjustment is<br>greater than 4.5% (the value of the 25th percentile of<br>the change of the debt-to-GDP ratio empirical density in<br>all episodes of fiscal adjustments).|<br>OLS, growth regressions<br>using only periods<br>where an adjustment<br>took place.|<br>OECD, 1970-<br>07|
|Biggs et al.<br>(2010)|CAPB improves by at least 1.5% of<br>GDP and data of Devries et al.<br>(2011).|Debt to potential GDP ratio has declined three years<br>following the first year of the consolidation by at least<br>4.5%.|No.|21 [15]<br>(OECD), 1970-<br>07 [1980-07]|

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