Cost of Austerity: Effect of Fiscal Consolidation in Europe Post 2010
38 Pages Posted: 4 Jun 2020
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: 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
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