Trimming the sails : the comparative political economy of expansionary fiscal consolidations : a Hungarian perspective

The book provides a clear, multidisciplinary and systematic analysis of the relatively new concept of the so-called expansionary fiscal consolidations. This concept suggests that fiscal adjustment should not be in trade-off with economic growth if certain conditions are met. But why do only a few countries and only at certain times experience the expansionary effects, while others not at all? The necessary institutional conditions and circumstances have been totally neglected in the literature, or analyzed only partially at best. Fiscal consolidation has significant short term costs which dampen economic growth. This widely shared consensus in literature on political economy makes fiscal adjustment highly unpopular. Benczes conducts a systematic analysis to find out whether it is possible to have fiscal consolidation and experience economic growth even in the short run. The book provides a clear, multidisciplinary and systematic analysis of the relatively new concept of the so-called expansionary fiscal consolidations. This concept suggests that fiscal adjustment can be in trade-off with economic growth if certain conditions are met. But why do only a few countries and only at certain times experience the expansionary effects, while others not at all? The necessary conditions and circumstances have been totally neglected in the literature, or analyzed only partially at best. Having evolved a theoretical framework, it is tested on a difficult case: Hungary, which has had the highest deficit in the European Union. The main question was whether Hungary has a chance to experience short term growth effects in times of adjustment Contents List of Figures List of Tables Acknowledgements 1. Introduction Part One. A Critical Assessment of the Concept of Non-Keynesian Effects 2. Stylized Facts of EU Countries’ Major Fiscal Episodes 3. An Expectational View of Fiscal Policy: A Non-Linear Approach to Fiscal Consolidation 4. The Composition of Adjustment and the Structure of Labor Markets: A Linear Approach to Fiscal Consolidation Part Two. Testing the Institutional Conditions of Non-Keynesian Effects in Hungary 5. Financial Intermediation in Hungary: A Comparative Perspective 6. The Expenditure Side of the Hungarian General Government: A Decompositional Analysis 7. Labor Market Structure and Wage Bargaining in Hungary: The (Ir)relevance of a Social Pact 8. Conclusion References Appendix 1 Appendix 2 Appendix 3 Index Provides a multidisciplinary and systematic analysis of the concept of fiscal consolidations. This book discusses the concept, suggesting that fiscal adjustment can be in trade-off with economic growth if certain conditions are met.