Fiscal consolidation and public debt in the European Union: Reevaluating the relationship

Lara Greta Merling and Alexandru Vladoi
Additional contact information
Lara Greta Merling: Bucharest University of Economic Studies, Romania
Alexandru Vladoi: Bucharest University of Economic Studies, Romania

Theoretical and Applied Economics, 2022, vol. XXIX, issue 2(631), Summer, 39-48

Abstract: 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.

Keywords: fiscal policy; public debt; expansionary austerity. (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://store.ectap.ro/articole/1593.pdf (application/pdf)
http://www.ectap.ro/articol.php?id=1593&rid=147 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:2(631):y:2022:i:2(631):p:39-48

Access Statistics for this article

Theoretical and Applied Economics is currently edited by Mircea Dinu

More articles in Theoretical and Applied Economics from Asociatia Generala a Economistilor din Romania / Editura Economica Contact information at EDIRC.
Bibliographic data for series maintained by Mircea Dinu ().