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Austerity and Growth in Central and Eastern Europe: Understanding the Link through Contrasting Crisis Management in Hungary and Latvia.

  • Metaadatok
Tartalom: http://real.mtak.hu/26449/
Archívum: MTA Könyvtár
Gyűjtemény: Status = Published

Type = Article
Cím:
Austerity and Growth in Central and Eastern Europe: Understanding the Link through Contrasting Crisis Management in Hungary and Latvia.
Létrehozó:
Győrffy, Dóra
Dátum:
2015-06
Téma:
HC2 Economic policy / gazdaságpolitika
Tartalmi leírás:
Within the context of international debates on fiscal consolidation this article examines
the experience of the 10 Central and Eastern European countries which joined the EU
in 2004 and 2007 (CEE-10) and asks how austerity influenced growth in the region.
By looking at the composition of adjustment, the analysis confirms the pre-crisis
consensus ? from the perspective of economic growth and competitiveness,
expenditure-based consolidations are superior to consolidations which are based on
raising revenue. The mechanisms behind this outcome are examined by comparing the
fiscal consolidations in Latvia and Hungary, which represent two different approaches
to fiscal consolidation. While Latvia followed the textbook approach, Hungary aimed
to save households from the burden of adjustment and stimulate the economy.
Although both achieved substantial improvements in their fiscal balance, competitive
gains and dynamic growth appeared only in the case of Latvia. In explaining this
outcome, the article emphasises the consequences of unorthodox measures on
expectations ? while a shared economic philosophy fostered trust and confidence
among the major actors in Latvia, growing state intervention and the deterioration of
institutional quality increased uncertainty in Hungary and undermined long-term
growth prospects.
Típus:
Article
PeerReviewed
Formátum:
text
Azonosító:
Győrffy, Dóra (2015) Austerity and Growth in Central and Eastern Europe: Understanding the Link through Contrasting Crisis Management in Hungary and Latvia. POST-COMMUNIST ECONOMIES, 27 (2). pp. 129-152. ISSN 1463-1377
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