To investigate the role of precrisis external imbalances that may have triggered both fiscal consolidation and larger-than-expected headwinds to growth, we control for the precrisis (2007) current-account-deficit-to-GDP ratio, again taken from the April 2010 WEO database (IMF, 2010c), and find similar results. We obtain similar results when controlling for the stock of precrisis (2007) net foreign liabilities in percent of GDP, based on the updated and extended version of dataset constructed by Lane and Milesi-Ferretti (2007). .
