-
Views
-
Cite
Cite
A Guger, Economic Policy and social democracy; the Austrian experience, Oxford Review of Economic Policy, Volume 14, Issue 1, March 1998, Pages 40–58, https://doi.org/10.1093/oxrep/14.1.40
Close - Share Icon Share
Abstract
In the 1970s, Austria's social democratic government pursued a distinctive policy strategy to overcome the period of stagflation and to maintain full employment after the first oil crisis. In the Keynesian tradition, the model assigned expansionary fiscal and monetary policy to stabilize effective demand and employment; the exchange rate to curb inflation; while the balance of trade was left to moderate incomes policies by the social partners. In the 1970s, this strategy was successful and the macroeconomic performance of the Austrian economy was outstanding. In the restrictive environment of the 1980s, the Austro-Keynesian model waned; while the stabilizing elements of the model, i.e. the hard currency and moderate incomes policies, were maintained, deficit spending as a discretionary strategy was given up. But, although the Austrian economy has been put under much competitive pressure owing to a continuous appreciation of the schilling along with the Deutschmark, its macroeconomic performance has been at least as good as the European or OECD average, but with lower unemployment.
