Evidence on Fiscal Consolidations and the Evolution of Public Debt in Europe
AbstractThe objective of this paper is to gain insights into the relationship between deficit-reducing policies and the evolution of the debt/GDP ratio. We consider past events of fiscal consolidation in a selected group of EU countries, by using the new data set recently made available by Devries et al. (2011), and check what is the associated change of the debt/GDP ratio both from a short and medium-term perspective. Our results show that a favourable short-term response emerges in the majority of the countries considered, while the medium-term one is adverse for all. The analysis provides information to assess the convenience of deficit-reducing policies to contain or invert the evolution of the debt/GDP ratio.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4027.
Date of creation: 2012
Date of revision:
fiscal consolidation; debt/GDP ratio; European Union;
Find related papers by JEL classification:
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
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