Poland has so far avoided austerity policies comparable to those conducted in Southern Europe and some Eastern European EU-member states. The country has been the only EU member state not to have undergone a recession since the outbreak of the financial crisis. The raising of government spending – particularly through increased public investment – has meant that Polish society has been sheltere...
This paper analyzes local and global equilibrium dynamics in an optimizing endogenous growth model under expenditure-based fiscal austerity feedback policies expressed relative to the private capital stock—prescribing spending cuts reaction public debt accumulation. Because present value of primary surpluses turns be a nonlinear function debt, two steady state equilibria are shown emerge, one e...
