Fiscal consolidation and public debt in the European Union: Reevaluating the relationship
The initial shock from and response to the Global Financial Crisis (GFC) in 2008 had a profound impact on the fiscal balances and subsequently the government debt ratios of countries in the European Union (EU). This paper examines the relationship fiscal consolidation measures and the changes in deb...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2022-06-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1593.pdf
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| Summary: | The initial shock from and response to the Global Financial Crisis (GFC) in 2008 had a
profound impact on the fiscal balances and subsequently the government debt ratios of countries in
the European Union (EU). This paper examines the relationship fiscal consolidation measures and
the changes in debt ratios that followed. The findings highlight that the negative feedback of fiscal
consolidation on economic growth in this context can translate into increases, rather than decreases
in government debt ratios. As debt levels in most European Union countries are reaching record
levels in the aftermath of Covid-19, these results warn of the risks of a stunted recovery if a similar
approach as in the aftermath of the GFC is pursued. |
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| ISSN: | 1841-8678 1844-0029 |