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A crisis of crisis management? Debates over fiscal adjustments in the European Monetary Union

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  • Zoltán Szalai

    () (Magyar Nemzeti Bank (central bank of Hungary))

Abstract

In response to increasing market pressure, EMU countries embarked on a robust consolidation process in 2010 in order to reduce their fiscal deficits and sovereign debt levels. Although – relying on external help in a number of cases – they have been implementing aggressive adjustment programmes, their public debt-to-GDP ratio is unlikely to change or change very much this or next year. Consequently, a debate has evolved over the effectiveness of fiscal tightening.

Suggested Citation

  • Zoltán Szalai, 2012. "A crisis of crisis management? Debates over fiscal adjustments in the European Monetary Union," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 7(3), pages 57-66, October.
  • Handle: RePEc:mnb:bullet:v:7:y:2012:i:3:p:57-66
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    File URL: http://www.mnb.hu/letoltes/szalai-eng.pdf
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    References listed on IDEAS

    as
    1. Richard Koo, 2011. "The World in Balance Sheet Recession," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(63), pages 7-39, July - Se.
    2. Daniel Gros & Rainer Maurer, 2012. "Can austerity be self-defeating?," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 47(3), pages 175-184, May.
    3. André Sapir & Marco Buti, 1998. "Economic policy in EMU," ULB Institutional Repository 2013/8078, ULB -- Universite Libre de Bruxelles.
    4. Simon Wren-Lewis, 2011. "Lessons From Failure: Fiscal Policy, Indulgence And Ideology," National Institute Economic Review, National Institute of Economic and Social Research, vol. 217(1), pages 31-46, July.
    5. Bergljot B Barkbu & Jesmin Rahman & Rodrigo O. Valdes, 2012. "Fostering Growth in Europe Now," IMF Staff Discussion Notes 12/07, International Monetary Fund.
    6. Pavlina R. Tcherneva, 2008. "Keynes's Approach to Full Employment: Aggregate or Targeted Demand?," Economics Working Paper Archive wp_542, Levy Economics Institute.
    7. Brender,Anton & Pisani, Florence & Gagna, Emile, 2012. "The Sovereign Debt Crisis: Placing a curb on growth," CEPS Papers 6951, Centre for European Policy Studies.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    fiscal consolidation; fiscal multipliers; confidence; public debt.;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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