Austerity in the European Union: Keynesian Stimulus versus Fiscal Consolidation

Gordon Brady ()

Atlantic Economic Journal, 2015, vol. 43, issue 1, 55-65

Abstract: This paper summarizes current EU austerity programs and discusses various fiscal policy reform proposals under consideration. It points out political and theoretical problems with these proposals and makes the case for fiscal consolidation through spending reduction rather than tax cuts. The paper provides supply side evidence of non-Keynesian expansions from spending cuts and identifies austerity and fiscal consolidation concerns for policy makers. The paper concludes that while the timing of spending cuts is important and there are political risks to fiscal consolidations which may frighten politicians, the economic payoffs justify austerity programs based primarily on budget and spending cuts. Copyright International Atlantic Economic Society 2015

Keywords: Fiscal policy; Public finance; E62; E00 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11293-014-9447-x (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:atlecj:v:43:y:2015:i:1:p:55-65

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11293/PS2

DOI: 10.1007/s11293-014-9447-x

Access Statistics for this article

Atlantic Economic Journal is currently edited by Kathleen S. Virgo

More articles in Atlantic Economic Journal from Springer, International Atlantic Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().