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L’expiation par l’austérité ou la stratégie de l’échec : une interprétation post-keynésienne de la crise des pays périphériques en zone euro
[Expiation through austerity or the strategy of failure: a Post-Keynesian explanation of sovereign debt crisis in the euro zone]

Author

Listed:
  • Charles, Sebastien
  • Dallery, Thomas

Abstract

This article deals with the sustainability of public debt within the Post-Keynesian framework proposed by Pasinetti in order to determine the stability conditions of the public debt/GDP ratio. This alternative and simple technique is used to assess the impact of austerity policies in some peripheral countries of the Eurozone, insisting on the bad diagnosis addressed about the causes of fiscal deficits. We show that these countries are compelled to ‘expiate’ sins they have not committed accepting austerity measures with noticeably dubious impacts.

Suggested Citation

  • Charles, Sebastien & Dallery, Thomas, 2013. "L’expiation par l’austérité ou la stratégie de l’échec : une interprétation post-keynésienne de la crise des pays périphériques en zone euro
    [Expiation through austerity or the strategy of failure:
    ," MPRA Paper 65735, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:65735
    as

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    File URL: https://mpra.ub.uni-muenchen.de/65735/1/MPRA_paper_65735.pdf
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    References listed on IDEAS

    as
    1. Pasinetti, Luigi L, 1998. "The Myth (or Folly) of the 3 Percent Deficit/GDP Maastricht 'Parameter.'," Cambridge Journal of Economics, Oxford University Press, vol. 22(1), pages 103-116, January.
    2. Berkmen, S. Pelin & Gelos, Gaston & Rennhack, Robert & Walsh, James P., 2012. "The global financial crisis: Explaining cross-country differences in the output impact," Journal of International Money and Finance, Elsevier, vol. 31(1), pages 42-59.
    3. Alesina, Alberto Francesco & Ardagna, Silvia, 2010. "Large Changes in Fiscal Policy: Taxes versus Spending," Scholarly Articles 22801844, Harvard University Department of Economics.
    4. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "Growth in a Time of Debt," American Economic Review, American Economic Association, vol. 100(2), pages 573-578, May.
    5. Primož Dolenc, 2006. "Doubtful Sustainability of Public Finances in Slovenia," Prague Economic Papers, University of Economics, Prague, vol. 2006(3), pages 268-281.
    6. Feldkircher, Martin, 2014. "The determinants of vulnerability to the global financial crisis 2008 to 2009: Credit growth and other sources of risk," Journal of International Money and Finance, Elsevier, vol. 43(C), pages 19-49.
    7. Annalisa Prizzon & Gianni Vaggi, 2009. "On The Sustainability of External Debt: Is Debt Relief Enough?," Quaderni di Dipartimento 094, University of Pavia, Department of Economics and Quantitative Methods.
    8. Luigi Spaventa, 1987. "The Growth of Public Debt: Sustainability, Fiscal Rules, and Monetary Rules," IMF Staff Papers, Palgrave Macmillan, vol. 34(2), pages 374-399, June.
    9. Alberto Alesina & Silvia Ardagna, 2010. "Large Changes in Fiscal Policy: Taxes versus Spending," NBER Chapters,in: Tax Policy and the Economy, Volume 24, pages 35-68 National Bureau of Economic Research, Inc.
    10. Primoz Dolenc & Igor Stubelj, 2010. "Fiscal sustainability in EU and current financial/economic crisis," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 2(1), pages 80-91.
    11. Hamilton, James D & Flavin, Marjorie A, 1986. "On the Limitations of Government Borrowing: A Framework for EmpiricalTesting," American Economic Review, American Economic Association, vol. 76(4), pages 808-819, September.
    12. Krugman, Paul, 2000. "How Complicated Does the Model Have to Be?," Oxford Review of Economic Policy, Oxford University Press, vol. 16(4), pages 33-42, Winter.
    13. Carlos E. Schonerwald da Silva & Matías Vernengo, 2007. "Foreign Exchange, Interest and the Dynamics of Public Debt in Latin America," Working Paper Series, Department of Economics, University of Utah 2007_02, University of Utah, Department of Economics.
    14. Giovanni Callegari & Giovanni Melina & Nicoletta Batini, 2012. "Successful Austerity in the United States, Europe and Japan," IMF Working Papers 12/190, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Public debt; Political economy of the Eurozone; Sustainability;

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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