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Expansionary Fiscal Consolidation Revisited: Evidence from the Over-Indebted Europe
Máca, Jaroslav ; Baxa, Jaromír (advisor) ; Holub, Tomáš (referee)
This thesis studies macroeconomic effects of fiscal consolidation on a sample of EU-28 countries for a period from 2004 to 2019 sticking primarily to the state-of-the-art narrative approach. For this purpose, we collect additional 2037 new fiscal measures to update publicly available dataset used in some previous papers. This is of interest as we demonstrate that cyclically adjusted primary balance in case of conventional approach can disregard a number of relevant findings. We do find moderate indications that fiscal consolidation can turn out to be expansionary in terms of enhancing GDP growth. In line with the existing literature, private investment is shown to react more strongly than private consumption. Nevertheless, success in terms of reducing public debt-to-GDP ratio is limited due to the low persistence of austerity measures. However, currency appreciation in countries with floating exchange rate regime can inhibit full materialization of growth-enhancing potential of fiscal consolidation. In the end, central bank is shown to cut interest rates to offset recessionary pressures. Further research shall revisit the role of composition. In fact, we reveal that tax-based austerity measures are typically chosen as "adjustment of the last resort" and successfully reverse course of history, while...
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Předpoklady úspěšné fiskální konsolidace
Novotný, Tomáš
The Diploma thesis deals with the question of rising budget deficits and public debts and focuses on the fiscal consolidation in developed countries. The main goal of the thesis is to identify the conditions that have to be met for successful process of fiscal consolidation. The First part of the thesis describes a concept of fiscal consolidation, and specifies its determinants and measurements. The second part analyses selected periods of fiscal consolidations and measure the evolution within the time period. The results of the analysis are consequently used for comparison and identification of conditions successful fiscal consolidation.
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Fiscal consolidations and their effects on income inequality. An empirical analysis of the distributional effects of austerity, using a novel approach to identify consolidation compositions
Scheibe, Conrad ; Baxa, Jaromír (advisor) ; Douarin, Elodie (referee)
This thesis investigates the effects of fiscal consolidations on income inequality. Although fiscal consolidations have become a popular economic research topic, their effects on income inequality, which itself has gained broad popularity lately, are relatively unexplored. Therefore, this thesis econometrically assesses the development of Gini coefficients during and after austerity measures. The paper applies regression analysis with panel data techniques using a sample of 17 high-income countries during the period of 1978 - 2009. It finds that a consolidation, measured by a deliberate improvement of the primary budget balance significantly increases income inequality of the referring country. In detail, an improvement of the primary budget balance about one percent of GDP is associated with an increase in market income inequality of 0.6% and a smaller increase in net income inequality in the year after. Moreover, this thesis explores the discretionary effect of different consolidation compositions. To do so, it introduces a novel approach to differentiate between consolidations that are either exclusively undertaken through spending cuts, tax increases or a combination of both. Thereby, it is found that especially tax-only consolidations tend to be equality-friendly but also rather small in size...
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Eurozone crisis and its parallel with japanese lost decade
Draisaitl, Michael ; Loužek, Marek (advisor) ; Titze, Miroslav (referee)
The thesis analyses problems of eurozone after the beginning of financial crisis in 2008, which continuously changed into economic and debt crisis. The thesis considers eurozone in aggregate and closer focuses on so called GIIPS (Greece, Ireland, Italy, Portugal, Spain) countries. Recent eurozone economic situation is compared to Japanese "lost decade" during 1990s, I seek for parallels and differences. Theoretical part shows approaches by economic schools to causes of cycle and to role of policymakers. Main challenges of fiscal and monetary policy are considered, specifically fiscal policy in time of high public indebtedness, monetary policy in liquidity trap etc. Applicative part considers causes of the economic situation at the beginning, more specifically devoted to balance sheets recession. Key part of the practical part it is analysis of applied fiscal and monetary policy, including helping efforts to financial system. Concluding remarks summarizes key understanding from the thesis, proposals are included and it is considered whether eurozone is going to follow Japanese path since 90's or not. It seems highly probable that eurozone is going to follow Japanese in terms of sluggish economic growth, parallels can be seen in weak impact of monetary policy in liquidity trap, but recommendations to fiscal policy from Japanese experience should be taken into account in very cautious way because of both specifics of eurozone and Japanese economy.
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Icelandic way out of crisis
Hendrych, Filip ; Jílek, Josef (advisor) ; Titze, Miroslav (referee)
This diploma thesis is focused on measures, which have been adopted in Iceland due to the crisis. The first part of the thesis follows up causes and a course of the Icelandic banking crisis in order to understand the situation which the Icelandic authorities had to respond. Subsequently there are outlined measures which are adopted and in the last part these measures are evaluated. Emphasis is placed on analysing the measures of capital controls, banking sector restructuring and fiscal consolidation. All measures have achieved their objectives and have had significant impact on current recovery. Therefore at the end of the thesis is discussed the possibility of these measures applicability in other countries.
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Economic and legal aspects of the Stability and Growth pact
TROJANOVÁ, Linda
The theoretical part describes what the Stability and Growth pact is, why and how it came into existence, and events which preceded it. This part also describes the Maastricht treaty and convergence criteria and the original Stability and Growth Pact as well as joining the European Monetary Union, which is important in terms of meeting the criteria by individual states. Furthermore, there is an analysis of the Stability and Growth pact and the changes that followed over the years after the pact became effective. Lastly, the theoretical part describes other contracts which arose after shortcomings in the Stability and Growth pact were identified. The practical part analyses how the Stability and Growth pact is followed by each country and adherence of Stability and convergence programmes. Finally, there is an assessment of level of indebtedness of individual European Union countries and of indebtedness of the European Union countries in global comparison.
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Fiskální politika v Evropské unii - Quo Vadis?
Žďárek, Václav ; Koderová, Jitka (advisor)
Práce se zaměřila na hodnocení fiskální politiky v Evropské unii. V prvé části jsme shrnuli vývoj fiskální politiky a názory ekonomický směrů na ni. Druhá část se věnuje vybraným problémem fiskální politiky. Je řešena otázka optimálního fiskálního pravidla. Ve třetí části práce je zachycen vývoj v eurozóně. Poslední část se zabývá alternativami pro omezení fiskální politiky v eurozóně.
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Fiscal consolidations in Czech republic in 2002-2012
Zmítko, Milan ; Hurník, Jaromír (advisor) ; Potužák, Pavel (referee)
The subject of this diploma work is to analyze proposals of fiscal consolidations in the Czech Republic and their following implementation in the years of 2002 to 2012. This work is trying to answer a question whether these proposals of the fiscal consolidaions were elaborated in agreement with research conclusions in the given field and whether they were successful in the sense of reduction of a deficit of the public budgets and public debt. In the first part of this work recent empirical studies with the following recomendations in the terms of realization of a fiscal consolidation are presented. Subsequently, a theoretical background in the form of keynesian and, so called, non-keynesian (expansionary fiscal consolidation hypothesis) effects of consolidation on economy is discussed. In the second part of this work an analysis of the proposals and implementation of the fiscal consolidations in the Czech Republic are presented with an attention to the evolution of the public budgets deficits and the public debt dynamic. The work uses, so called, narrative approach which is based on a study of open public documents from the archives of the Ministry of Finance of the Czech Republic, Parliament of the Czech Republic and the Czech National Bank. In the conclusions of this analysis it is stated that not a single implemented fiscal consolidation was successful in the terms of a reduction of the public budgets deficits and the public debt.
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