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Do Austerity Measures Harm International Trade?

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  • CHIRIȚOIU Dorin Iulian
  • BURLACU Rodica

Abstract

This paper focuses on the trade relations between Romania and the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) in order to verify whether the exports of Romania have been positively or negatively affected by the austerity measures adopted by these Eurozone periphery countries, thus diminishing Romania’s export performance in such markets. Hence, our main research question is whether austerity measures harm or affect in any way the inflows and outflows of international trade in the studied countries. To assess this hypothesis, we focused on the external trade relations, and their linkages with the macroeconomic environment, rather than the competitiveness of a state explained by a detailed sectoral analysis. In this respect, we use comparative and descriptive statistics in order to observe the consequences of the internal devaluation, and implicitly austerity measures, on the PIIGS-Romanian trade relations. Our findings suggest that the effects of austerity measures are not homogenous because they depend on the scale of trade exchanges and on the way in which the austerity measures were applied.

Suggested Citation

  • CHIRIȚOIU Dorin Iulian & BURLACU Rodica, 2015. "Do Austerity Measures Harm International Trade?," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 01, March.
    • Handle: RePEc:jis:ejistu:y:2015:i:01:id:395
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    References listed on IDEAS

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    1. Schaltegger, Christoph A. & Weder, Martin, 2014. "Austerity, inequality and politics," European Journal of Political Economy, Elsevier, vol. 35(C), pages 1-22.
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    4. Vassilis Monastiriotis, 2014. "(When) Does Austerity Work? On the Conditional Link between Fiscal Austerity and Debt Sustainability," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 8(1), pages 71-92, June.
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    More about this item

    Keywords

    international trade; austerity; competitiveness; debt crisis;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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