The Roots of the Eurozone Sovereign Debt Crisis: PIGS vs Non-PIGS
AbstractThe main purposes of this paper are twofold: on the one hand, to determine if there are significant differences of regime on public expenditures, total revenues and tax revenues between the so-called PIGS and the remaining Eurozone member states and, on the other hand, to uncover possible explanations for the quite different situations in which these countries find themselves nowadays. This work focus on the effect of the cyclical state of the economy, captured by the unemployment rate, and on the two fiscal rules imposed by the Maastricht Treaty on the Eurozone member states. Based on the estimated results, which distinguish between PIGS and non-PIGS countries, we come to the conclusion that the anti-cyclical reaction with respect to the unemployment rate is much stronger among non-PIGS. We also find that fiscal rules have, in general, not been obeyed by the two groups of countries. Moreover PIGS, in spite of their economic frailties, have, instead, tried to emulate the fiscal behavior of their more prosperous Eurozone partners instead of implementing more rigorous policies.
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Bibliographic InfoPaper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 413.
Length: 36 pages
Date of creation: May 2011
Date of revision:
European public finance; fiscal policy; fiscal rules;
Find related papers by JEL classification:
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H5 - Public Economics - - National Government Expenditures and Related Policies
- H6 - Public Economics - - National Budget, Deficit, and Debt
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- Abel L. Costa Fernandes & Paulo R. Mota, 2013. "The Euro Zone Peripheral Countriesâ€™ Sovereign Debt Crisis: Also a Case of Non-Mature Democracies?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(3), pages 291-310, May.
- Francisco Rebelo & Ester Gomes da Silva, 2013.
"Export variety, technological content and economic performance: The case of Portugal,"
FEP Working Papers
491, Universidade do Porto, Faculdade de Economia do Porto.
- Francisco Rebelo & Ester Gomes da Silva, 2013. "Export variety, technological content and economic performance: The case of Portugal," Papers in Evolutionary Economic Geography (PEEG) 1310, Utrecht University, Section of Economic Geography, revised Jun 2013.
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