38-61

• Καπόπουλος, Παναγιώτης

In the 1980s debt had grown rapidly in most European countries. Many governments started to pursue stabilization policies to remove the danger of debt explosion. However, the design of stabilization policies in heavily indebted economies is extremely difficult. This paper contrasts the stabilization programmes of these countries and draws out preliminary conclusions for the design of such programmes in small open economies. Programmes relying on gevernment expenditure reduction, seem to be more successful than those that rely on revenue increases. The Danish and the Second Irish Stabilization are the main examples that support this conclusion.

• Economics and Business

• Economic policy
• Macroeconomics

Περιέχει πίνακες, διαγράμματα, υποσημειώσεις και βιβλιογραφία, I am grateful to George Alogoskoufis, Nicos Christodoulakis, George Demopoulos and Sophia Lazaretou for their valuable comments and suggestions on preliminary drafts of this paper. I have also benefited from the comments and suggestions of an anonymous referee of this journal. An earlier draft of this paper was completed when I was a Visiting Researcher at the European University Institute, Florence. It has been adapted from a part of a chapter of my Ph. D. dissertation at the Athens University of Economics and Business. The responsibility for any remaining errors and omissions is solely alone. Any views in this article are those of the author and they should in no part be attributed to the Alpha Credit Bank.