Fiscal Adjustment between 1991 and 2002: Stylised Facts and Policy Implications
ECB Occasional Paper No. 9
40 Pages Posted: 2 Aug 2005
Date Written: February 2004
Abstract
This paper aims to assess whether the implementation of the European Union (EU) framework of fiscal rules has been successful in promoting budgetary consolidation in EU Member States. The paper focuses on the period 1991-2002. Stylised facts show that Member States implemented major budgetary adjustments in the 1990s marking clear structural breaks in the policy regimes compared with the previous decade. However, most progress was made via revenue-based adjustment, including temporary measures, with insufficient emphasis put on primary expenditure restraint. In recent years, "consolidation fatigue" has been evident in many Member States. Although an unfavourable economic environment has adversely affected nominal budget balances in recent years, budget indicators suggest that the process of budgetary adjustment, which started in the 1990s, is far from complete in many countries.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects
-
Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects
-
Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries
By Francesco Giavazzi and Marco Pagano
-
Searching for Non-Linear Effects of Fiscal Policy: Evidence from Industrial and Developing Countries
By Francesco Giavazzi, Tullio Jappelli, ...
-
Fiscal Policy, Profits, and Investment
By Alberto F. Alesina, Silvia Ardagna, ...
-
Non-Keynesian Effects of Fiscal Policy Changes: International Evidence and the Swedish Experience
By Francesco Giavazzi and Marco Pagano
-
The Benefits of Crises for Economic Reforms
By Allan Drazen and Vittorio Grilli
-
Trigger Points and Budget Cuts: Explaining the Effects of Fiscal Austerity
By Giuseppe Bertola and Allan Drazen
-
Searching for Non-Keynesian Effects of Fiscal Policy
By Francesco Giavazzi, Tullio Jappelli, ...