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Business & Economics

Probability of Non-Keynesian Effects of Public Finance Consolidation in Poland
Danuta Milaszewicz

ABSTRACT. The reduction of deficit and public debt became priorities for the Polish economy but the effects and methods of public finance consolidation cause much controversy. Short-term effects may be either Keynesian (production fall) or non-Keynesian (production growth) in nature. The study aims to present the possible short-term effects of public finance consolidation and tightening of the fiscal policy in Poland within one phase of economic cycle. The paper explores (according to both the Keynesian and the non-Keynesian approaches) the short-term impact of the fiscal consolidation on the economy, analyses the character of the fiscal policy adopted in Poland, presents the scale and methods of its tightening, and makes an attempt to relate the model approaches to the reality of the Polish economy.

The decisions concerning the consolidation of public finance in the Polish economy will reduce uncertainty, yet this positive change may be insufficient to reverse the Keynesian effects of this process.

KEYWORDS: fiscal policy, deficit, debt, studies of particular policy episodes, Poland.

JEL classification: E62, E65, H62, H63.