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Non-Keynesian Effects of Fiscal Consolidations in Central Europe in the Years 2000-2013

In: Entrepreneurship, Business and Economics - Vol. 2. Proceedings of the 15th Eurasia Business and Economics Society

Author

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  • Adam P. Balcerzak

    (Nicolaus Copernicus University, Poland)

  • Elzbieta Rogalska

    (University of Warmia and Mazury in Olsztyn, Poland)

Abstract

Last two decades were a period of significant discussion concerning determinants of effectiveness of fiscal policy. After some cases of expansionary episodes of fiscal consolidations in eighties of XX century, an intensive international research on the possibility of non-Keynesian effects of fiscal contractions in highly developed countries has started. The aim of the article is to analyze the possibility of obtaining non-Keynesian effects of fiscal consolidations in post-transformation countries of Central Europe. An important aim of macroeconomic policy in the analyzed economies is to benefit the advantages of convergence process. Thus, the empirical analysis is made within conditional ß-convergence framework. The verification of hypothesis of ß-convergence enables to identify the long term tendency of output per capita, in the same time it enables to identify non-Keynesian effects of fiscal prudence and to assess their role in the process of reducing GDP gap between the analyzed economies. Then the potential transmission channels for non-Keynesian effects of fiscal policy were analyzed. In the research the data from Eurostat and European Commission for the years 2000-2013 was used. The paper provides arguments in favor of the existence of non-Keynesian effects of fiscal consolidations in Central Europe that support the process of conditional convergence.

Suggested Citation

  • Adam P. Balcerzak & Elzbieta Rogalska, 2016. "Non-Keynesian Effects of Fiscal Consolidations in Central Europe in the Years 2000-2013," Chapters, in: Mehmet Huseyin Bilgin & Hakan Danis (ed.),Entrepreneurship, Business and Economics - Vol. 2. Proceedings of the 15th Eurasia Business and Economics Society, edition 1, volume 2, chapter 18, pages 271-282, Institute of Economic Research.
    • Handle: RePEc:pes:ecchap:9
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    Cited by:

    1. Adam P. Balcerzak & Michal Bernard Pietrzak, 2016. "Dynamic Panel Analysis of Influence of Quality of Human Capital on Total Factor Productivity in Old European Union Countries," Working Papers 19/2016, Institute of Economic Research, revised May 2016.

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    More about this item

    Keywords

    fiscal policy; fiscal consolidations; non-Keynesian effects; ß-conditional convergence; Central Europe;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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