The Impact of Austerity Measures on Government Borrowing in GIIPS


Ersoy İ. S. , Yanmaz T.

International Journal of Economics and Finance, cilt.8, ss.106-112, 2016 (Diğer Kurumların Hakemli Dergileri)

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 8
  • Basım Tarihi: 2016
  • Doi Numarası: 10.5539/ijef.v8n12p106
  • Dergi Adı: International Journal of Economics and Finance
  • Sayfa Sayıları: ss.106-112

Özet

The article investigates the effects of austerity measures on government debt in Greece, Ireland, Italy, Portugal and Spain (GIIPS) by employing panel cointegration test and using data between 1998 and 2014. The result of empirical analysis shows that tax rate increase on personal income did not result with decrease in government debt. Interest rate and wage that are control variables are also positively related with government debt levels. The result of this empirical analysis suggests that the impact of austerity measures on government borrowing in GIIPS is positive, despite the expectations of certain economic agents.