Trimming the Sails
The comparative political economy of expansionary fiscal
consolidations
István Benczes, Corvinus University,
Budapest
"A concise, well-structured scholarly work that
offers rich, albeit careful analysis with balanced views
on the diverse literature. The monograph pays special
attention to critically assessing the underlying theories
and marshals solid evidence on the growing relevance
of non-Keynesian effects in markets both East and West.
The work sheds new light, long sought after, on why
there has been only slight progress made and on why
repeated failures characterized the Hungarian fiscal
sece." - The Journal of Comparative Economic
Studies
"According to conventional wisdom, fiscal contractions
come with economic and political costs. Reduction in
deficit is widely believed to have a negative short-term
effect on economic growth and employment and, for that
reason, to be politically unpopular. István Benczes's
study is the first book-length treatment of the issue.
It combines a critical survey of the literature with
a quantitative analysis of fiscal adjustment in the
pre-enlargement EU and an in-depth case study of Hungary,
the EU country with the highest fiscal deficit in 2006."
- Acta Oeconomica
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 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.
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.
"István Benczes, besides giving a very comprehensive
and critical review of the literature, has done an excellent
job in pushing the limits of research toward new territories.
A most welcome novelty of his work is the investigation
of the role of the financial system in the examination
of non-Keynesian effects." - György Szapáry,
Former Vice Governor, Hungarian National Bank
"This book is an exciting contribution to the
comparative political economy of expansive fiscal consolidations
and their preconditions. Eminently suited for classroom
use and as a reference volume." - László
Csaba, Member of the Hungarian Academy of Sciences and
former President, European Association for Comparative
Economic Studies
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. From Goulash Communism
To Neo-Kadarism: An Overview 6. Financial Intermediation
in Hungary—a Comparative Perspective 7. The Structure
of the Hungarian General Budget—a Decompositional
Analysis 8. The Labor Market and Wage Bargaining in
Hungary—the (Ir)relevance of a Social Pact 9.
Conclusion References Appendices Index
2008
273 pages
ISBN 978-963-9776-01-2 cloth $44.95 / €32.95 /
£30.00
|
