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2014
- ISIDORE Id: 10670/1.58ea66...
- hal: hal-03460660
- doi: 10.2298/PAN1401021H
- SCIENCESPO: 2441/6fiderh62j8n1au8s8acc66css
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info:eu-repo/semantics/altIdentifier/hdl/2441/6fiderh62j8n1au8s8acc66css
info:eu-repo/semantics/OpenAccess
Mots-clés
Public debt Growth European macroeconomic policy E - Macroeconomics and Monetary Economics/E.E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook/E.E6.E61 - Policy Objectives • Policy Designs and Consistency • Policy Coordination E - Macroeconomics and Monetary Economics/E.E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook/E.E6.E62 - Fiscal Policy E - Macroeconomics and Monetary Economics/E.E4 - Money and Interest Rates/E.E4.E47 - Forecasting and Simulation: Models and ApplicationsSujets proches
Indebtedness Euro area Euro zoneCiter ce document
Christophe Blot et al., « Is There an Alternative Strategy for Reducing Public Debt by 2032? », HAL SHS (Sciences de l’Homme et de la Société), ID : 10.2298/PAN1401021H
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Résumé
The German debt brake is often regarded as a great success story and has therefore served as a role model for the Euro area and it’s Fiscal Compact. In this paper we fundamentally criticise the debt brake. Firstly, we show that it suffers from serious shortcomings and that its success is far from certain even from a mainstream point of view. Secondly, we show that, from a Post-Keynesian perspective, the debt brake completely neglects the require- ments for fiscal policies of member countries in a currency union like the Euro area. It will prevent fiscal policy from contributing to the necessary rebalancing in the Euro area. Thirdly, we show that alternative scenarios, which could avoid the deflationary pressures of the German Debt Brake on domestic demand and contribute to internally rebalancing the Euro area, are extremely unlikely as they would have to rely on unrealistic shifts in the functional income distribution and/or investment and savings behaviour in Germany.
