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Begrotingsbeleid in crisistijd
[Fiscal policy in times of crisis]

Author

Listed:
  • Afman, E.R.
  • van de Coevering, C.R.

Abstract

Dutch Public finances have taken a severe hit. As a result of the financial crisis, government debt has increased by 20 percentage points to almost 66 percent of GDP. Without a significant improvement of the EMU balance debt will continue to rise in the coming years. The current crisis raises questions about the required pace for improving government finances. Developments in economic theory and the experience of the 1970s, when supply problems were met by demand stimulus, have taught us the limitations of active budgetary policy. Nonetheless, these policies experienced a revival at the start of the current crisis when economies were faced with a sudden large drop in demand. The more structural nature of the low growth and the high debt are important arguments not to persevere with these policies in the coming years. It will not be possible to "outgrow debt" as was feasible in the past. The increasing importance of international financial markets are an additional reason to improve the Dutch budgetary position in the short term.

Suggested Citation

  • Afman, E.R. & van de Coevering, C.R., 2012. "Begrotingsbeleid in crisistijd [Fiscal policy in times of crisis]," MPRA Paper 60261, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:60261
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    More about this item

    Keywords

    Begrotingsbeleid; crisis; economische groei; financiële markten;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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