Abstract
The main purpose of this chapter is to review the French public finances over a long horizon in order to examine whether the common view, largely shared during the latest presidential election, according to which French governments have always been ‘deficit runners’, is right. In fact, we show that French deficits since 1980 have stemmed from: (i) the large gap between long-term interest rates and economic growth in the early 1980s; (ii) high unemployment and low economic growth, most notably during the recession of the early 1990s whose effects have been felt until recently; and (iii) pro-cyclical policies related to the electoral cycle.
We are very grateful to Jérôme Adda whose remarks and comments have helped us to substantially improve this chapter. The usual disclaimer applies. This study is part of project ANR — FRAL 022 — Local Rules, financed by Agence Nationale de la Recherche.
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© 2008 Jérôme Creel, Guy Gilbert and Thierry Madiès
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Creel, J., Gilbert, G., Madiès, T. (2008). Has France Become a Deficit Running Country?1. In: Ferreiro, J., Fontana, G., Serrano, F. (eds) Fiscal Policy in the European Union. Palgrave Macmillan, London. https://doi.org/10.1057/9780230228269_7
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DOI: https://doi.org/10.1057/9780230228269_7
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