Fiscal policy in Europe

Barrell, Ray and Gottschalk, Sylvia ORCID logoORCID: (2007) Fiscal policy in Europe. National Institute Economic Review, 201 (1) . pp. 33-36. ISSN 0027-9501 [Article] (doi:10.1177/0027950107083047)


The impacts of fiscal expansion are very uncertain, and they depend amongst other things upon the impacts of policy on expectations of the future. If the French Government does not make clear that it has a long-term commitment to reducing the deficit, the perception that taxes will rise in the future may induce consumers to retrench. It is possible, as Giavazzi and Pagano (1990) argue, to induce a contractionary fiscal expansion in such cases. However, if long-term commitments are clear, and if the policy of expansion is justified in terms of offsetting the contractionary effects of labour market reform, then the multiplier impacts of the expansion should show their normal positive values.

Item Type: Article
Research Areas: A. > Business School > Economics
Item ID: 31938
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Depositing User: Sylvia Gottschalk
Date Deposited: 15 Feb 2021 21:10
Last Modified: 15 Feb 2021 21:10

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