Economics, Econometrics and Finance
4 years ago

Austrian public debt skyrockets due to structural causes, not political ideologies.

SSRN Electronic Journal
Sustainability of Austrian Public Debt: A Political Economy Perspective
Gottfried Haber, Reinhard Neck

Paper Summary

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The article examines the sustainability of Austrian public debt by looking at how political goals influence fiscal policies. From 1960 to 1974, Austrian fiscal policies were sustainable, but after 1975, public debt increased rapidly. The growth of public debt in Austria is driven more by structural causes than political ideologies. Governments led by one party tend to have higher deficits than coalition governments. There is no evidence of a political business cycle in Austria.