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Research Article Open access CC BY 4.0

Fiscal Policy, does it Really Matter? The (non) Impact of Fiscal Consolidation Policies on Growth

Julián Pérez García, Julián Moral Carcedo, Diego Cano Soler

Journal of Economics, Management and Trade · pp. 172–185 · Published 19 Dec 2014

10.9734/BJEMT/2015/15177

Abstract

Following the outbreak of the sovereign debt crisis in the euro zone, austerity policies have emerged as the solution to the ills devastating the economies on the periphery. The impact of fiscal consolidation policies on growth remains an open question. There is widespread acceptance of a short-term negative impact alongside a broad range of opinions regarding the results in the medium and long term. This difference of opinion is primarily the result of the various theoretical approaches applied to this analysis. Because of its importance, in this article we take a predominantly applied approach to characterizing the effects of the processes involved in public deficit reduction at the macro level. Our result mainly rely in a statistical description of the results reported by the different European economies in periods of fiscal consolidation.  

Fiscal consolidation growth

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