Brinca, PedroFonseca, Miguel Ângelo De Sá Monteiro Da2020-09-182020-09-182020-01-222020-01http://hdl.handle.net/10362/104271This work studies the response of social welfare to fiscal consolidations, by focusingon a less debated characteristic of fiscal plans: the speed of deleveraging. A neo-classical overlapping generations model is calibrated to the German economy, anda sequence of reductions of the same size in the debt-to-GDP ratio are simulatedconsidering different adjustment periods. Welfare gains are found to be larger inslow, delayed fiscal consolidations, due to the presence of incomplete markets. It isalso found that the aggregate welfare response depends on the distribution of wealthand the type of fiscal instrument used.engFiscal consolidationWealth inequalityIncomplete marketsConsumption smoothing hypotesismaster thesis202492303