Alesina and Ardagna claimed 26 expansionary adjustments across nine OECD countries

Evidence

To make this new case for expectations-driven expansions, Alesina and Ardanga examine twenty-one OECD countries from 1970 to 2007 and select 107 episodes of positive and negative adjustment to make their case. Twenty-six of those episodes qualify as expansionary fiscal adjustments, occurring across nine countries. That is, debts are lower three years out and growth is higher than the seventy-fifth percentile of the average of the set of the observations. This time around, as we saw in the section on the effects of expectations, the results of the econometrics again lack the caveats of their prior piece. — Mark Blyth, Austerity, 472

Categorization

• QUESTION: The ‘seventy-fifth percentile’ threshold is an unusual and generous bar for calling an adjustment expansionary — worth chasing exactly how it compares to the earlier ‘Tales’ methodology.
• XREF: connects to: The 2010 Alesina-Ardagna piece claimed spending cuts hurt growth by 0.75 percentage points — Mark Blyth, Austerity: The History of a Dangerous…, 473