The impact of austerity measures on economic growth in the Eurozone
Journal Title: Acta Economica - Year 2014, Vol 12, Issue 21
Abstract
have a more severe compliance of the Maastricht fiscal criteria. Requirements for implementation of austerity measures are contradictory to the Keynesian central preposition which says that the right time for austerity is the period of growth not period of crisis. Tis paper seeks to answer the question: Did austerity measures contributed to the decline of real GDP from 2010 to 2013? Regression analysis was conducted on a sample of 13 Eurozone countries. The results show that the growth rates of real GDP are largely caused by austerity measures. The fiscal multiplier of 1.98 indicates that the increase in savings of 1% leads to a fall of real GDP by 1.98%.
Authors and Affiliations
Васиљ Жарковић, Миленко Крајишник, Драган Глигорић
Keywords
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- EP ID EP43795
- DOI https://doi.org/10.7251/ACE1421043Z
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