Austerity at the Treasury. A review of the recent literature Cover Image

Cięcia budżetowe. Przegląd najnowszych badań
Austerity at the Treasury. A review of the recent literature

Author(s): Mariusz Maziarz
Subject(s): Economy, Public Finances
Published by: Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu
Keywords: public debt; economic growth; expansionary fiscal contraction hypothesis; threshold hypothesis; Reinhart-Rogoff affair; austerity

Summary/Abstract: The goal is analyzing the most recent cliometric literature on two hypotheses connected to one of the most fiercing problems of the world economy, i.e. historically highest levels of public debt. The author focuses on research published after 2009 aimed at assessing the 90% threshold hypothesis and the expansionary fiscal contraction hypothesis. The opinions among cliometricians are vastly divided. The author concludes that (1) a great dose of scepticism is needed in assessing the recent empirical findings, (2) the 90% threshold hypothesis is not proven, (3) austerity at the Treasure should take place after a recession ends due to possible contractionary influence and (4) it should be based on spending cuts rather than tax increases.

  • Issue Year: 2016
  • Issue No: 10
  • Page Range: 9-21
  • Page Count: 13
  • Language: Polish