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.
This article examines the relationship between defence expenditure and its impact on the growth of NATO’s countries between 2005 and 2018. The aim is to determine if this relation exists and to test if it is possible to discover different models across the countries. The results obtained using the Arellano–Bond estimator, suggest that there is more than one model, and confirm, through the poolability test, the existence of five different groups of countries within the Alliance, with different impacts of the defence expenditure on their gross domestic product. These findings are in line with the review of existing literature that reveals heterogeneity in the results due to different parameters used.
This article studies the different scenarios for the fiscal union in the Eurozone beyond 2019. It explains the different alternatives that the literature has explored to ensure fiscal transfers within Eurozone states as well as for common debt issuance. It also describes the role that monetary policy has played as a backstop for sovereign defaults and highlights the limits that inflation and an anti-euro backlash impose on public debt sustainability.
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