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Can fiscal consolidations be expansionary in the EU? Ex-post evidence and ex-ante analysis

Author

Listed:
  • Gabriele Giudice
  • Alessandro Turrini
  • Jan in 't Veld

Abstract

This paper analyses non-Keynesian effects in fiscal consolidations in the EU. The analysis is carried out both ex-post, i.e. by looking at the emergence of expansionary consolidations in the past and at their characteristics, and ex-ante, i.e. by simulating with the European Commission QUEST model under which conditions public finance consolidation would exhibit non-Keynesian effects in the current EMU context.

Suggested Citation

  • Gabriele Giudice & Alessandro Turrini & Jan in 't Veld, 2003. "Can fiscal consolidations be expansionary in the EU? Ex-post evidence and ex-ante analysis," European Economy - Economic Papers 2008 - 2015 195, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0195
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    Citations

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    Cited by:

    1. Giavazzi, Francesco & Jappelli, Tullio & Pagano, Marco & Benedetti, Marina, 2005. "Searching for Non-monotonic Effects of Fiscal Policy: New Evidence," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 23(S1), pages 197-217, October.
    2. Christophe Blot & Jerôme Creel & Bruno Ducoudré & Xavier Timeau, 2015. "Back to fiscal consolidation in Europe and its dual tradeoff : now of later, through spending cuts or tax hikes," Documents de Travail de l'OFCE 2015-11, Observatoire Francais des Conjonctures Economiques (OFCE).
    3. Paweł Borys & Piotr Ciżkowicz & Andrzej Rzońca, 2014. "Panel Data Evidence on the Effects of Fiscal Policy Shocks in the EU New Member States," Fiscal Studies, Institute for Fiscal Studies, vol. 35, pages 189-224, June.
    4. Kapopoulos, Panayotis, 2004. "When can fiscal consolidation be expansionary? Evidence from a small open economy," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 1031-1043, December.
    5. Bikai, Landry, 2010. "Les Effets Non Lineaires Des Deficits Budgetaires Sur L´Activite Economique En Cemac [Threshold Effects of Budgetary Policy on Economic Growth in Cemac]," MPRA Paper 24524, University Library of Munich, Germany.
    6. George D. Demopoulos & Nicholas A. Yannacopoulos, 2015. "Conditions that may invalidate the prediction of the expansionary austerity policies," Working Papers 201502, Athens University Of Economics and Business, Department of Economics.
    7. Hans Pitlik & Norbert Gruber & Ewald Walterskirchen, 2010. "An International Comparison of Success Factors for Budget Consolidation Strategies," Austrian Economic Quarterly, WIFO, vol. 15(2), pages 198-210, July.
    8. BIKAI, J. Landry, 2015. "Fiscal Rules and Pro-cyclicality of the Fiscal Policy in CEMAC countries," MPRA Paper 78229, University Library of Munich, Germany.
    9. Piotr Ciżkowicz & Grzegorz Parosa & Andrzej Rzońca, 2022. "Fiscal tensions and risk premium," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(3), pages 833-896, August.
    10. Eleni Roussou & Norman Cameron, 2005. "The Impact of the European Economic & Monetary Union on the Stability of the Greek Economy," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 85-98.
    11. Gordon Brady, 2015. "Austerity in the European Union: Keynesian Stimulus versus Fiscal Consolidation," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(1), pages 55-65, March.
    12. Hideaki Tanaka, 2005. "Fiscal Rules and Targets and Public Expenditure Management - Enthusiasm in the 1990s and its Aftermath," Finance Working Papers 22705, East Asian Bureau of Economic Research.
    13. repec:hal:spmain:info:hdl:2441/6018jmm8rk9oroimutg7hhiu3f is not listed on IDEAS
    14. Hideaki Tanaka, 2005. "Fiscal Rules and Targets and Public Expenditure Management: Enthusiasm in the 1990's and its Aftermath," Asia Pacific Economic Papers 346, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    15. Noveski Martin, 2018. "Macroeconomic effects of the budget deficit in the Republic of Macedonia," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 4(2), pages 5-14, November.
    16. Asztalos, Viktor, 2015. "Politikai változások a költségvetési kiigazítások tükrében [Political changes in the light of fiscal adjustments]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1196-1210.
    17. Simon Voigts, 2016. "VAT multipliers and pass-through dynamics," SFB 649 Discussion Papers SFB649DP2016-026, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    18. Abdenour, Redouan & Tounsi, Said, 2015. "Non-Linear Effects of Fiscal Policy on Economic Growth: Moroccan Case," MPRA Paper 69830, University Library of Munich, Germany, revised 2016.
    19. Eduardo Garzón Espinosa & Bibiana Medialdea García & Esteban Cruz Hidalgo, 2021. "Fiscal Policy Approaches: An Inquiring Look From The Modern Monetary Theory," Journal of Economic Issues, Taylor & Francis Journals, vol. 55(4), pages 999-1022, October.
    20. Karim Triki, 2016. "Expenditure-based Consolidation: Experiences and Outcomes – Workshop proceedings," European Economy - Discussion Papers 026, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    21. Gordon L. Brady & Cosimo Magazzino, 2017. "The Sustainability of Italian Public Debt and Deficit," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 23(1), pages 9-20, February.
    22. Casimir Dadak, 2011. "Political Economy of the Euro Area Crisis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(5), pages 593-604, December.
    23. Maria Gabriella Briotti, 2005. "Economic reactions to public finance consolidation - a survey of the literature," Occasional Paper Series 38, European Central Bank.

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