Work

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

Year: 2022

Type: article

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.

Source: Global Policy

DOI: 10.1111/1758-5899.13129

Authors: Alfredo Arahuetes García, Gonzalo Gómez Bengoechea

Institution: Universidad Pontificia Comillas

Language: English

Topic: Fiscal Policies and Political Economy

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,700