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The aim of the paper is to estimate the effects of structural public balance adjustment on growth in 25 OECD countries with special attention to selected Eurozone countries in the years 2000-2013. The estimates show a positive effect of discretionary fiscal policy on GDP growth and support the conclusion that structural adjustments have negative effects on growth irrespective of macroeconomic conditions. These results show that, if the reduction of the structural balance has to be considered as an objective to be achieved per se, such a goal should not be pursued in times of deteriorating macroeconomic conditions. Comparative Economic Studies (2014) 56, 635-656. doi: 10.1057/ces.2014.26; published online 9 October 2014 Keywords: fiscal policy, structural adjustment, growth, cross-section analysis dynamic panel data analysis, pooled mean group estimator JEL Classification: E60, E62, C21, C23, INTRODUCTION Advanced economies have been forced to manage the unsustainability of their public finances as a consequence of the 2007 financial crisis because public deficits have been increased in order [...]