Cost of Austerity: Effect of Fiscal Consolidation in Europe Post 2010

38 Pages Posted: 4 Jun 2020

See all articles by Nelson Rayl

Nelson Rayl

affiliation not provided to SSRN

Date Written: May 8, 2020

Abstract

This paper investigates the effect of fiscal consolidation on GDP per capita following the 2008 Financial Crisis and European Debt Crisis. I use the synthetic control method to assess the GDP performance of three European countries that pursued large quantities of fiscal consolidation: Greece, Spain and Italy. I estimate that without fiscal consolidation GDP per capita would have been 30, 11, and 17 percent higher in each country respectively.

Keywords: Fiscal Policy, Fiscal Consolidation, Austerity, Synthetic Control Method, SCM

JEL Classification: E62, E65, E00

Suggested Citation

Rayl, Nelson, Cost of Austerity: Effect of Fiscal Consolidation in Europe Post 2010 (May 8, 2020). Available at SSRN: https://ssrn.com/abstract=3596470 or http://dx.doi.org/10.2139/ssrn.3596470

Nelson Rayl (Contact Author)

affiliation not provided to SSRN

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