{"title":"Fiscal austerity and monetary easing: which one is to be praised for ending the euro area crisis?","authors":"P. Posta","doi":"10.25428/1824-2979/201801-165-189","DOIUrl":null,"url":null,"abstract":"In this paper I have used a framework for the analysis of public debt stability that dates back to Domar, and I have extended it in order to consider, together with the role played by the interest rate, the rate of GDP growth and domestic fiscal policy, also monetary solidarity. A special role has been reserved in the analysis to the effects of agents’ heterogeneous expectations and uncertainty. I have also considered the effects of fiscal austerity and monetary solidarity on GDP growth and interest rates, and I have concluded that the euro area crisis came to an end thanks to the latter (the former having made things even worse, if anything). Within the same framework, I have been able to discuss also some of the other proposals, including federal solidarity, that have been advanced in the literature in order to avoid or to address future euro area crises.","PeriodicalId":43449,"journal":{"name":"European Journal of Comparative Economics","volume":"22 1","pages":"165-189"},"PeriodicalIF":0.4000,"publicationDate":"2018-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"European Journal of Comparative Economics","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.25428/1824-2979/201801-165-189","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"EDUCATION & EDUCATIONAL RESEARCH","Score":null,"Total":0}
引用次数: 3
Abstract
In this paper I have used a framework for the analysis of public debt stability that dates back to Domar, and I have extended it in order to consider, together with the role played by the interest rate, the rate of GDP growth and domestic fiscal policy, also monetary solidarity. A special role has been reserved in the analysis to the effects of agents’ heterogeneous expectations and uncertainty. I have also considered the effects of fiscal austerity and monetary solidarity on GDP growth and interest rates, and I have concluded that the euro area crisis came to an end thanks to the latter (the former having made things even worse, if anything). Within the same framework, I have been able to discuss also some of the other proposals, including federal solidarity, that have been advanced in the literature in order to avoid or to address future euro area crises.
期刊介绍：
Several years have elapsed since the beginning of transition in Eastern Europe, and the profession has learnt a lot about the importance of institutions in the economy and our deep need for additional research on their influence on the interaction of the units that play the economic game. The study of economies that do not fit the paradigm of the competitive market, a field of enquiry that used to belong to the sideline of scientific enquiry, has been joined by leading scientists in the field, who were inspired by the new knowledge gained through the processes of transition and intrigued bthe policy problems posed by transformation of bureaucratically run socialist economies into capitalist market economies. The same institutional and social understanding is equally relevant to questions of conomic development, to the elimination of cleavages between North and South, and to the solution of problems of globalization.
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