Back to the Future: Lessons from the 2009–2012 austerity policies for the aftermath of the COVID crisis

Alfredo Arahuetes () and Gonzalo Gómez Bengoechea

Global Policy, 2022, vol. 13, issue 5, 751-766

Abstract: This paper studies the relationship between austerity intensity and adjustment processes in the Eurozone in the period 2000–2021. We empirically analyse fiscal consolidation and its impact on a set of internal adjustment and expansionary austerity indicators. We also evaluate the relationship of those indicators with GDP growth using quantile regressions. Results show that austerity programmes had a negative impact on growth both in the short‐run and in the long‐run. Expansionary austerity indicators play a more relevant role in determining short‐term growth than internal adjustment. This effect is more intense in slow‐growing countries since internal adjustment processes take more time to operate.

Date: 2022
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https://doi.org/10.1111/1758-5899.13129

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Persistent link: https://EconPapers.repec.org/RePEc:bla:glopol:v:13:y:2022:i:5:p:751-766

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