Econometric analysis of macroeconomic effects of fiscal consolidation in new member states of the European union

Cilj ovog rada jest analizirati makroekonomske učinke fiskalne konsolidacije u novim zemljama članicama Europske unije. Navedene članice nizale su do 2008. godine izuzetne stope ekonomskog rasta i uživale stabilne javne financije, no izbijanjem krize, i posljedično prestankom priljeva inozemnog kapitala, zemlje su se pokazale izuzetno ranjivima. Stoga su sve nove države članice osim Estonije tijekom krize bile uključene u proceduru prekomjernog deficita, i sve osim Hrvatske, Cipra i Slovenije uspješno su ju završile, uloživši znatne fiskalne napore. Međutim, unatoč efikasnosti u smanjenju proračunskog manjka, problem koji je i dalje aktualan su visoke stope rasta javnog duga. Kako bi se analizirali učinci fiskalne konsolidacije na javni dug (te pritom ispitala adekvatnost mjera štednje u postizanju održivog javnog duga) provedena je panel analiza. Rezultati su pokazali da smanjenje primarnog deficita proračuna zaista smanjuje stopu rasta javnog duga, ali je taj učinak prilično malen.The aim of this master's thesis is to analyze macroeconomic effects of fiscal consolidation in New Member States of the European Union. Until 2008 these Member States have had exceptional economic growth rates and stable public finance, but once the crisis burst out and consequently caused sudden stop of foreign capital inflows, the states turned out to be very vulnerable. Hence, all New Member States except Estonia have been included in the Excessive deficit procedure during the crisis, and all of them except Croatia, Cyprus and Slovenia ended it successfully by putting enormous fiscal effort. However, despite the efficiency in reducing budget deficit, serious public debt growth rates are the ongoing problem. In order to analyze the impact of fiscal consolidation on public debt (and assess the adequacy of austerity measures in achieving sustainable public debts) panel data analysis was conducted. The results showed that the reduction of budget deficit really decreases public debt growth rates, but the effect is rather small