Elżbieta Rogalska

Fiscal Contractions in Eurozone in the years 1995-2012: Can non-Keynesian effects be helpful in future deleverage process?

Last global financial crisis has led to massive fiscal stimulation actions in EU which resulted in significant increase of public debt. As a result, in near future EU countries will have to adopt much stricter long term fiscal policy that will be necessary for deleveraging process. In this context the aim of the research is to check whether one can find non-Keynesian effects of fiscal consolidations in Eurozone countries in last decade. If the answer is positive, then could these non-Keynesian effects be significant developing factor. The third scientific question concentrates on the ways the fiscal consolidations were implemented and the potential influence of consolidations strategies on short term growth. The research is based on European Commission and Eurostat fiscal and macroeconomic data for the years 1995–2013. The econometric dynamic panel model based on the concept of conditional convergence was applied. As a complementary method qualitative analysis of cases of significant contractions was used with the concentration on the differences between expansionary and conventional Keynesian cases of fiscal contractions. The research gives some arguments for existence of fiscal transitions channels leading to non-Keynesian effects of fiscal policy, which in the same time can be a factor of conditional convergence.

Non-Keynesian Effects of Fiscal Consolidations in Central Europe in the Years 2000–2013

Last two decades were a period of significant discussion concerning determinants of effectiveness of fiscal policy. After some cases of expansionary episodes of fiscal consolidations in eighties of XX century, an intensive international research on the possibility of non-Keynesian effects of fiscal contractions in highly developed countries has started. The aim of the article is to analyze the possibility of obtaining non-Keynesian effects of fiscal consolidations in post-transformation countries of Central Europe. An important aim of macroeconomic policy in the analyzed economies is to benefit the advantages of convergence process. Thus, the empirical analysis is made within conditional s-convergence framework. The verification of hypothesis of s-convergence enables to identify the long term tendency of output per capita, in the same time it enables to identify non-Keynesian effects of fiscal prudence and to assess their role in the process of reducing GDP gap between the analyzed economies. Then the potential transmission channels for non-Keynesian effects of fiscal policy were analyzed. In the research the data from Eurostat and European Commission for the years 2000-2013 was used. The paper provides arguments in favor of the existence of non-Keynesian effects of fiscal consolidations in Central Europe that support the process of conditional convergence.

Crowding Out and Crowding in within Keynesian Framework : Do We Need Any New Empirical Research Concerning Them?

Last global financial crisis resulted in common among developed countries implementation of expansionary fiscal policy as an anti-recession tool. This led to the renewal of academic discussion on stabilization effectiveness of fiscal policy. In this context, the main research goal of this paper is to give theoretical analysis of the determinants of counter-cyclical effectiveness of fiscal policy with special concentration on crowding out and crowding in effects. Methodologically the analysis is done within Keynesian IS-LM framework within the assumption of expectations of economic actors. The theoretical analysis is confronted with the review of empirical papers based on the experiences of developed countries.