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Anna Kalbhenn

1 April 2015
WORKING PAPER SERIES - No. 1774
Details
Abstract
In this paper we explore the impact of fiscal austerity on three different dimensions of public opinion (overall life satisfaction and confidence, attitude towards national authorities, and European institutions). Based on a panel of 26 EU countries, we find that, overall, fiscal consolidation episodes tend to have little and inconsistent impact on our measures of public opinion once we include macro controls (real GDP growth, inflation, unemployment, and whether a country is in a EU/IMF program). Some of the circumstances under which consolidation is undertaken are significant in explaining the effect on public opinion, but also these effects are neither strong nor consistent throughout. We conclude that the effect of fiscal consolidation measures on public opinion mainly operates through their effect on the macroeconomy.
JEL Code
H2 : Public Economics→Taxation, Subsidies, and Revenue
H3 : Public Economics→Fiscal Policies and Behavior of Economic Agents
H5 : Public Economics→National Government Expenditures and Related Policies
H6 : Public Economics→National Budget, Deficit, and Debt