The significance of fiscal space in Europe’s response to the crisis
AbstractThe textbook response to deteriorating economic performance is monetary easing, the lowering of official interest rates. When the financial and economic crises hit Europe in 2008, however, monetary policy had very little room in most European countries, as the central bank interest rates were already pretty low. Fiscal policy instruments had to be used therefore, a branch of economic policy that was believed to be dated by many mainstream economists. In contrast to their interest rate conditions, the European countries formed a quite heterogeneous group in regard to their fiscal space: some had more because of balanced budgets and relatively low national debt ratios; others had a lot less. The paper analyses the responses given by 30 European countries to the crisis, and combines the effects with the pre-2008 fiscal characteristics. It identifies some clusters based on their performance and on their major fiscal indicators before and after the crisis.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40346.
Date of creation: 2012
Date of revision:
fiscal space; European economies;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alan J. Auerbach & William G. Gale, 2009.
"Activist fiscal policy to stabilize economic activity,"
Proceedings - Economic Policy Symposium - Jackson Hole,
Federal Reserve Bank of Kansas City, pages 327-374.
- Alan J. Auerbach & William G. Gale, 2009. "Activist Fiscal Policy to Stabilize Economic Activity," NBER Working Papers 15407, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.