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Fiscal adjustment – strategies and consequences: empirical evidence for European Union economies

Author

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  • Brasoveanu, Laura

    () (ASE, Finance Department)

  • Brasoveanu, Iulian

    (ASE, Finance Department)

Abstract

The current economic context brings new challenges for all countries in order to take action for fiscal adjustment, as a reaction for decreasing of public revenues, through lowering the tax base and the capacity to collect taxes, and for the inability to adjust the public expenditures. Fiscal adjustment could be done through increasing public revenues, decreasing public expenditures or applying a mixed strategy. The effectiveness and the consequences of a fiscal adjustment depends on the adopted strategy, but also on the size and the composition of the fiscal adjustment. In this paper we identify the fiscal adjustment strategies applied in European Union countries and we examine the evidence on fiscal adjustments in order to determine the relevant factors for the success and expansionary effects.

Suggested Citation

  • Brasoveanu, Laura & Brasoveanu, Iulian, 2012. "Fiscal adjustment – strategies and consequences: empirical evidence for European Union economies," Working Papers 28/2012, Universidade Portucalense, Centro de Investigação em Gestão e Economia (CIGE).
  • Handle: RePEc:ris:cigewp:2012_028
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    More about this item

    Keywords

    fiscal policy; fiscal discipline; fiscal adjustment; public revenues; public expenditures;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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