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Effects Of Fiscal Consolidation On Regional Economics Resilience: Institutional Design Metters?

Author

Listed:
  • Christophe FEDER

    () (Professor, University of Aosta Valley, Str. Cappuccini, 2, Aosta, Italy)

  • Vinko MUSTRA

    () (Assistant professor, Faculty of economics, business and tourism, University of Split, Cvite Fiskovi?a 5, Split, Croatia)

Abstract

After the Great Recession, in the European Union (EU) emerges an heterogenous level of both national fiscal consolidation and regional economics resilience. The paper uses the EUROSTAT database of EU-27 at NUTS 2 level over the period 2000-2009 to test how fiscal consolidation affects the regional economics resilience. We find that the fiscal consolidation and regional economic resilience are negatively correlated. Moreover, we show that the negative effect of taxation is higher than the positive effect of public spending.

Suggested Citation

  • Christophe FEDER & Vinko MUSTRA, 2018. "Effects Of Fiscal Consolidation On Regional Economics Resilience: Institutional Design Metters?," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 37-45, June.
  • Handle: RePEc:hrs:journl:v:x:y:2018:i:1:p:37-45
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    Keywords

    After the Great Recession; in the European Union (EU) emerges an heterogenous level of both national fiscal consolidation and regional economics resilience. The paper uses the EUROSTAT database of EU-27 at NUTS 2 level over the period 2000-2009 to test how fiscal consolidation affects the regional economics resilience. We find that the fiscal consolidation and regional economic resilience are negatively correlated. Moreover; we show that the negative effect of taxation is higher than the positive effect of public spending.;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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