Fiscal Austerity versus Growth in Croatia

Contemporary Economics, Vol. 9, No. 1, pp. 77-92, 2015

16 Pages Posted: 19 May 2015

See all articles by Marinko Skare

Marinko Skare

Juraj Dobrila University of Pula

Romina Prziklas Druzeta

Juraj Dobrila University of Pula (UNIPU)

Date Written: April 1, 2015

Abstract

The role of fiscal austerity has been questioned for centuries, but a rapidly increasing deficit along with the financial crisis in 2007/2008 influenced a renewed debate on the economics of austerity. This paper analyzes the role of austerity versus the role of economic growth. It also attempts to highlight the role of the theoretical context of austerity policy and the economic history lesson learned during the transition from the Bretton Woods model to Washington’s consensus. Despite numerous studies and polarized debate, no consensus on the implementation of fiscal austerity has been achieved because this complex subject has not been the subject of a sufficient methodological exploration. Emphasis should be placed on defining the methodology of austerity and gathering statistical data to influence the implementation of social transfer policies. In addition, it is necessary not only to take a hybrid approach to fiscal and monetary policy but also to adopt economic laws and quantitative economic relationships. The benchmarking country used in this paper is Croatia. The outcome of this research can serve as the basis for future decision-making and research.

Keywords: fiscal austerity; economic growth; business cycles; macroeconomic adjustments

JEL Classification: O1, O2, E62, E63, F43

Suggested Citation

Skare, Marinko and Prziklas Druzeta, Romina, Fiscal Austerity versus Growth in Croatia (April 1, 2015). Contemporary Economics, Vol. 9, No. 1, pp. 77-92, 2015 , Available at SSRN: https://ssrn.com/abstract=2607409

Marinko Skare (Contact Author)

Juraj Dobrila University of Pula ( email )

Preradoviceva 1/1
Pula, Istarska Zupanija 52100
Croatia
385 52 377000 (Phone)
385 52 216 416 (Fax)

HOME PAGE: http://www.efpu.hr

Romina Prziklas Druzeta

Juraj Dobrila University of Pula (UNIPU) ( email )

Zagrebačka 30
Pula, 52100
Croatia

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