The Impact of Austerity Measures on Government Borrowing in GIIPS

Imre Ersoy and Talha Yanmaz

International Journal of Economics and Finance, 2016, vol. 8, issue 12, 106-112

Abstract: The article investigates the effects of austerity measures on government debt in Greece, Ireland, Italy, Portugal and Spain (GIIPS) by employing panel cointegration test and using data between 1998 and 2014. The result of empirical analysis shows that tax rate increase on personal income did not result with decrease in government debt. Interest rate and wage that are control variables are also positively related with government debt levels. The result of this empirical analysis suggests that the impact of austerity measures on government borrowing in GIIPS is positive, despite the expectations of certain economic agents.

Keywords: austerity measures; tax rate; government debt; GIIPS countries; panel cointegration analysis (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:8:y:2016:i:12:p:106-112

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