The Wall Street Journal cited the latest IMFS Working Paper " Fiscal Consolidation Strategy: An Update for the Budget Reform Proposal of March 2013" by John F. Cogan, John B. Taylor, Volker Wieland, Maik Wolters. Cogan et al. (2013) evaluate this year's budget reform proposal that is to be
discussed and voted on in the House of Representative in March 2013. They estimate the macroeconomic impact of a fiscal consolidation strategy in which the government gradually reduces deficits by mainly cutting government purchases and transfer payments in order to stabilize government debt. They simulate the strategy in a modern economic model calibrated to the U.S. and euro area economies and show that this consolidation strategy can increase GDP immediately and permanently relative to a policy without spending restraint.
Link to the IMFS Working Paper "Fiscal Consolidation Strategy: An Update for the Budget Reform Proposal of March 2013".
You can read the WSJ article here.
Link to the blog contribution of John Taylor.