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Despite the current recession in many parts of the OECD, fiscal consolidation is likely in many OECD economies in the 1990s. The author asks: is fiscal consolidation in the OECD in a period of low growth a recipe for global stagnation? In particular, what effects are likely in developing countries? The author starts with an overview of cuts in the U.S. fiscal deficit proposed by the Clinton administration and the extent to which European governments...
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