Fiscal consolidation and economic growth

Diplomsko delo obravnava vpliv fiskalne konsolidacije na gospodarsko rast. Po izbruhu svetovne finančne krize v letu 2008 je evroobmočje doživelo močan gospodarski udarec, ki je pripeljal do obsežnih državnih intervencij, povečanja javnih dolgov in fiskalnih primanjkljajev. Fiskalna konsolidacija, ki se nanaša na prizadevanje vlad, da bi zmanjšale svoje proračunske primanjkljaje in stabilizirale javni dolg, je postala ključna agenda za mnoge članice evroobmočja. Nekatere ključne ukrepe, ki so jih države evroobmočja sprejele, so vključevale povečanje davkov, s čimer so želele pridobiti dodatne proračunske prihodke, vendar so višji davki v mnogih primerih zavirali investicije in zasebno potrošnjo, kar je negativno vplivalo na gospodarsko rast. Vzporedno so mnoge države zmanjšale vladne izdatke, vključno z omejitvami v socialnih programih in javnih investicijah. Čeprav so takšni ukrepi pripomogli k zmanjšanju proračunskih primanjkljajev, so v kratkoročnem obdobju pogosto zavirali gospodarsko rast zaradi izpada agregatnega povpraševanja. Dodatno breme relativno večjega javnega dolga je povečalo obrestna bremena in pritisnilo na vladne proračune, kar je sprožilo še večje potrebe po fiskalni disciplini. Države so se posledično znašle v začaranem krogu. Vzporedno z ukrepi za zmanjšanje proračunskih primanjkljajev so se vlade soočale z dejstvom, da so fiskalni multiplikatorji v času gospodarske krize višji od konvencionalnih ocen. To je pomenilo, da so bile reakcije na fiskalno prilagajanje pogosto močnejše in škodljivejše za gospodarsko rast.This thesis examines the impact of fiscal consolidation on economic growth. Following the global financial crisis in 2008, the euro area was hit by a severe economic shock which led to large-scale government intervention, rising public debts and fiscal deficits. Fiscal consolidation, which refers to efforts by governments to reduce their budget deficits and stabilise public debt, has become a key agenda for many euro area Member States. Some of the key measures taken by euro area countries have included tax increases to raise additional revenues. However, in many cases higher taxes have held back investment and private consumption, which has had a negative impact on economic growth. Parallelly, many countries have cut government spending, including restrictions in social programmes and public investment. While such measures have helped to reduce budget deficits, they have often held back economic growth in the short term due to reduced aggregate demand. The additional burden of a relatively higher public debt has increased interest burdens and put pressure on government budgets, triggering even greater demands for fiscal discipline. Consequently, countries have found themselves in a vicious circle. In parallel with budget deficit reduction measures, governments have been confronted with the fact that in times of economic crisis fiscal multipliers have been higher than suggested by conventional estimates. This meant that the reactions to fiscal adjustment were frequently stronger and more damaging for economic growth