Back to the Future: Lessons from the 2009–2012 austerity policies for the aftermath of the COVID crisis. Issue 5 (22nd August 2022)

• Record Type: Journal Article
• Authors: García, Alfredo Arahuetes; Bengoechea, Gonzalo Gómez
• Is Part Of: Global policy. Volume 13:Issue 5(2022)
• Page Start: 751
• Page End: 766
• Publication Date: 2022-08-22
• Subjects: Globalization -- Periodicals; International relations -- Periodicals; World politics -- Periodicals; 327.1705
• DOI: 10.1111/1758-5899.13129
• Languages: English
• ISSNs: 1758-5880

Abstract

Abstract: This paper studies the relationship between austerity intensity and adjustment processes in the Eurozone in the period 2000–2021. We empirically analyse fiscal consolidation and its impact on a set of internal adjustment and expansionary austerity indicators. We also evaluate the relationship of those indicators with GDP growth using quantile regressions. Results show that austerity programmes had a negative impact on growth both in the short‐run and in the long‐run. Expansionary austerity indicators play a more relevant role in determining short‐term growth than internal adjustment. This effect is more intense in slow‐growing countries since internal adjustment processes take more time to operate.