Why Austerity Can Be Self-Defeating for Member States of a Currency Union
Intereconomics - Review of European Economic Policy
8 Pages Posted: 11 May 2017
There are 2 versions of this paper
Why Austerity Can Be Self-Defeating for Member States of a Currency Union
Number of pages: 19
Posted: 03 Feb 2012
Last Revised: 29 Mar 2012
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Date Written: January 15, 2012
Abstract
Despite all efforts to reduce government budget deficits, debt-to-GDP ratios of crisis-hit member states of the European Monetary Union are still growing faster than expected. At the same time GDP growth performance is poor and according to most forecasts expected to worsen. In this paper I show that this is the likely outcome of austerity policy in member states of a currency union with overindebted private sectors.
Keywords: Fiscal Policy, Austerity Debate, Currency Union
JEL Classification: E62
Suggested Citation: Suggested Citation
Maurer, Rainer, Why Austerity Can Be Self-Defeating for Member States of a Currency Union (January 15, 2012). Intereconomics - Review of European Economic Policy, Available at SSRN: https://ssrn.com/abstract=2966869
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