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Public Investment, Growth and Fiscal Constraints: Challenges for the EU New Member States.

Public Investment, Growth and Fiscal Constraints: Challenges for the EU New Member States. Eastern Economic Journal, 2013, 39, (564–565) r 2013 EEA 0094-5056/13 www.palgrave-journals.com/eej/ Book Review Public Investment, Growth and Fiscal Constraints: Challenges for the EU New Member States. Edited by Massimo Florio. Cheltenham, UK and Boston, MA: Edward Elgar, 2011. 302 pp., $125.00. ISBN: 1-849-80457-5. Anil Duman Central European University The recent financial crisis has stirred up the discussion about convergence between EU new member states (NMS) and old member states, and how to achieve growth across the entire EU. Public Investment, Growth and Fiscal Constraints contributes to this debate by focusing on the role public investment can play, and the extent to which public expenditures can enhance growth given the fiscal problems facing many countries. Three main sections follow a brief introduction by the editor. The first part looks at the relationship between public investment and economic growth both from theoretical and empirical perspectives. Malcolm Sawyer reviews the “fiscal consolidation and Ricardian equivalence” approach and the “functional finance” approach to budget deficits. He suggests that the latter is more appropriate since it takes the highest sustainable output into account rather than a balanced budget over the cycle. Thus, the Stability and Growth Pact, with its golden rule, has little merit http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Eastern Economic Journal Springer Journals

Public Investment, Growth and Fiscal Constraints: Challenges for the EU New Member States.

Duman, Anil
Eastern Economic Journal , Volume 39 (4) – Sep 10, 2013
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Publisher
Springer Journals
Copyright
Copyright © 2013 by Eastern Economic Association
Subject
Economics; Economics, general; Economic Theory/Quantitative Economics/Mathematical Methods
ISSN
0094-5056
eISSN
1939-4632
DOI
10.1057/eej.2013.19
Publisher site
See Article on Publisher Site

Abstract

Eastern Economic Journal, 2013, 39, (564–565) r 2013 EEA 0094-5056/13 www.palgrave-journals.com/eej/ Book Review Public Investment, Growth and Fiscal Constraints: Challenges for the EU New Member States. Edited by Massimo Florio. Cheltenham, UK and Boston, MA: Edward Elgar, 2011. 302 pp., $125.00. ISBN: 1-849-80457-5. Anil Duman Central European University The recent financial crisis has stirred up the discussion about convergence between EU new member states (NMS) and old member states, and how to achieve growth across the entire EU. Public Investment, Growth and Fiscal Constraints contributes to this debate by focusing on the role public investment can play, and the extent to which public expenditures can enhance growth given the fiscal problems facing many countries. Three main sections follow a brief introduction by the editor. The first part looks at the relationship between public investment and economic growth both from theoretical and empirical perspectives. Malcolm Sawyer reviews the “fiscal consolidation and Ricardian equivalence” approach and the “functional finance” approach to budget deficits. He suggests that the latter is more appropriate since it takes the highest sustainable output into account rather than a balanced budget over the cycle. Thus, the Stability and Growth Pact, with its golden rule, has little merit

Journal

Eastern Economic Journal – Springer Journals

Published: Sep 10, 2013

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