Fiscal Consolidations and Public Debt in Europe

Gianluca Cafiso and Roberto Cellini

Working Papers from CEPII research center

Abstract: The objective of this paper is to gain insights into the relationship between deficit-reducing policies and the evolution of the debt/GDP ratio. We consider past events of fiscal consolidation in a selected group of EU countries and check what is the associated change of the debt/GDP ratio both from a short and medium-term perspective. As for the medium-term perspective, we do also differentiate between tax-based and savings-based fiscal consolidations. Our results point towards a positive short-term effect, while the medium-term effect turns out to be negative. Savingsbased fiscal consolidations result to be less negative on the debt/GDP ratio’s evolution than tax-based ones.

Keywords: Fiscal consolidations; debt/GDP ratio; Europe (search for similar items in EconPapers)
JEL-codes: E63 H63 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-acc, nep-eec, nep-mac, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Fiscal consolidations and public debt in Europe (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2013-35

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