The European debt crisis and fiscal reactions in Europe 2000-2014

Baldi, Guido; Staehr, Karsten (2016). The European debt crisis and fiscal reactions in Europe 2000-2014. International economics and economic policy, 13(2), pp. 297-317. Springer 10.1007/s10368-014-0309-4

Preview

Text European Debt Crisis.pdf - Published Version Available under License Publisher holds Copyright. Download (317kB) | Preview

After the outbreak of the global financial crisis, some governments in the EU experienced serious fiscal problems, while others were less affected. This paper seeks to shed light on the divergent fiscal performance in the EU countries before and after the outbreak of the crisis. Fiscal reaction functions of the primary balance are estimated for different groups of EU countries using quarterly data for the pre-crisis period 2001–2008 and for the crisis period 2009–2014. The pre-crisis estimations reveal some differences in persistence and cyclical reaction between different groups of countries, but in most cases little feedback from the debt stock to the primary balance. The fiscal reaction functions of the countries that eventually developed fiscal problems do not stand out. The estimations on data from the crisis period show largely unchanged persistence and counter-cyclicality but much more feedback from the debt stock, and this applies both to the crisis countries and those less affected. In spite of large deficits and accumulation of debt, the underlying fiscal reaction has become more prudent after the outbreak of the European debt crisis.

Interest & Impact

Downloads

77 since deposited on 11 Jul 2017
45 in the past 12 months

Citations

5 Citations in Web of Science ®
6 Citations in Scopus

Search

in Google Scholar™

Services

Actions (login required)

Edit item

Actions (login required)

Edit item