Macroeconomic and distributional effects of fiscal consolidation measures in EU countries
By: Heimberger, Philipp.
Contributor(s): Matzner, Anna.
Material type:
BookSeries: wiiw Working Papers: 270Publisher: Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 2026Description: 22 S., 1 Table and 7 Figures, 30cm.Subject(s): Fiscal consolidation | austerity | growth | unemployment | income inequality | European UnionCountries covered: Austria | Belgium | Denmark | European Union | Finland | France | Germany | Ireland | Italy | Netherlands | Portugal | Spain | Swedenwiiw Research Areas: Macroeconomic Analysis and Policy | Labour, Migration and Income DistributionClassification: H60 | E62 Online resources: Click here to access online Summary: We provide new evidence on the effects of fiscal consolidation measures on output, unemployment, income inequality and consumer price inflation. To identify causal impacts, we use a narrative-based instrumental variable strategy drawing on historical records of exogenous fiscal changes motivated by deficit reduction, covering 12 EU countries from 1980 to 2020. Our results for the short to medium run show that fiscal consolidations (a) lower real output; (b) raise the unemployment rate; (c) increase income inequality; and d) reduce consumer price inflation. Contractionary macroeconomic effects are stronger during recessions than during non-recession periods.
| Cover image | Item type | Current library | Home library | Collection | Shelving location | Call number | Materials specified | Vol info | URL | Copy number | Status | Notes | Date due | Barcode | Item holds | Item hold queue priority | Course reserves | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Paper | WIIW Library | 5.700/270 (Browse shelf(Opens below)) | Available | 1000010007525 |
We provide new evidence on the effects of fiscal consolidation measures on output, unemployment, income inequality and consumer price inflation. To identify causal impacts, we use a narrative-based instrumental variable strategy drawing on historical records of exogenous fiscal changes motivated by deficit reduction, covering 12 EU countries from 1980 to 2020. Our results for the short to medium run show that fiscal consolidations (a) lower real output; (b) raise the unemployment rate; (c) increase income inequality; and d) reduce consumer price inflation. Contractionary macroeconomic effects are stronger during recessions than during non-recession periods.