Naslov
FISCAL AND MACROECONOMIC EFFECTS OF AUSTERITY MEASURES IN THE REPUBLIC OF CROATIA

Autori
Burnać, Paško ; Pečarić, Mario

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Conference Proceedings of 7th International Scientific Symposium "Economy of eastern Croatia - vision and growth" / Mašek Tonković, Anka ; Crnković, Boris - Osijek : Ekonomski fakultet Sveučilišta Josipa Jurja Strossmayera u Osijeku, 2018, 952-959

Skup
7. međunarodni znanstveni simpozij: Gospodarstvo istočne Hrvatske – vizija i razvoj = 7th International Scientific Symposium: Economy of Eastern Croatia – Vision and Growth

Mjesto i datum
Osijek, Hrvatska, 24.05.2018. - 26.05.2018

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
austerity measures, fiscal consolidation, expansionary consolidation hypothesis, economic growth, Republic of Croatia, narrative approach

Sažetak
The recent global economic crisis and the concerns about the sustainability of public finances have resulted in stronger implementation of austerity measures and fiscal consolidations. Fiscal consolidation or fiscal adjustment is a term that represents the process of harmonization of public revenues and public expenditures by reducing expenditures and/or increasing revenues. The objective of fiscal consolidation is to reduce the budget deficit and to balance the state budget in each fiscal year. Fiscal adjustment is closely related to austerity policy- reducing the expenditure side of the state budget. The theoretical and empirical literature does not offer a consensus on the impact of these measures. Empirical research offers a rationale for both the contractionary and expansionary effects of austerity measures on economic activity. Studies that examine the macroeconomic and fiscal effects of consolidation in developed countries are not frequent nor have a long history, while the same effects in the Republic of Croatia are completely un-investigated. This paper tries to shed some light on this relationship. An additional contribution of this paper relates to the usage of the narrative approach introduced by Romer and Romer (2010). The narrative approach suggests that previous empirical literature has been contaminated by using the indicators for fiscal consolidation which may be subject to serious miss measurements errors leading to a strong bias towards finding an expansionary fiscal consolidation. The research results do not support the expansionary fiscal consolidation hypothesis. Therefore, the study suggests that fiscal consolidation, ie. austerity measures in the Republic of Croatia during recent crises were not successful in achieving proclaimed macroeconomic goals such as economic growth.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA