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Macroeconomic Effects Of Fiscal Consolidation In Eu Post-Transition Countries

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  • Pasko Burnac

    (University of Split)

Abstract

Fiscal consolidation or fiscal adjustment are macroeconomic terms that indicate the process of harmonization of public revenue and public expenditure by reducing expenditures and / or increasing revenues. Studies that examine the macroeconomic and fiscal effects of consolidation in developed countries are rare and of rather recentdate, while the same effects in the post-transition countries are completely uninvestigated. This paper tries to shed some light on this relationship.epaper studies the macroeconomic and fiscal variables before, during and after the period of consolidation and identifies changes to these variables having occurred during and after consolidation. The research results do not support the expansionary fiscal consolidation hypothesis. Therefore, descriptive analysis suggests that apart from minor corrections of the exchange rate and reduced labour costs, fiscal consolidation in the post-countries was not successful in achieving macroeconomic goals such as economic growth and reduced unemployment.

Suggested Citation

  • Pasko Burnac, 2017. "Macroeconomic Effects Of Fiscal Consolidation In Eu Post-Transition Countries," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 26(1), pages 219-240, june.
    • Handle: RePEc:avo:emipdu:v:26:y:2017:i:1:p:219-240
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    More about this item

    Keywords

    fiscal consolidation; post-transition countries; economic growth;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation

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