FROM FISCAL AUSTERITY POLICIES TO FISCAL TRAP: A REVIEW IN THE CONTEXT OF EU PERIPHERY COUNTRIES

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The objective of this study is to discuss the theoretical basics of contractionary economic policy and to evaluate the sucess of these policies under today’s circumstances and fiscal trap risk for periphery countries of EU. After the post 2008 küresel financial crisis in many of developed and developing countries bailout plans and stimulus packages including spending rise/tax cut have been applied in order to ease the effects of the crisis and to prevent the effects get deeper. Implementing the bailout and stimulus packages caused public sector balances get worse like public sector deficit/GDP and public debt/GDP. In order to eliminate this situation stimulus packages are replaced by austerity policies. But today under the circumstances in which there are low growth rates tight fiscal policy put down fiscal trap risk on the agenda with a process that feeds itself. This condition is especially observed in the post crisis economic performances of periphery countries of the EU.

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Fiscal Policy , Austerity Policy , Fiscal Trap , EU Countries

Journal Of Economics an‎d Administrative Sciences

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Journal Of Economics an‎d Administrative Sciences