Abstract:

The Great Recession was a milestone for the history of public finance. The lessons learned from this recession will enlighten the new fiscal theories and fiscal policies’ implications. This study investigates fiscal policies applied after the Great Recession of 2008 in the selected countries (i.e., the USA, Germany, Spain, Italy, Greece, and Turkey). At the beginning of this recession, the countries implemented expansionary monetary policies, provided bailout packages, gave the state’s guarantee and made expropriations. As a result of the implementation of expansionary fiscal policies that stimulated the real economy, the debt burden of the states increased, and the income distribution deteriorated in favor of the financial sector. It was concluded that the fiscal policies did not become permanent again after the 2008 Crisis in the countries analyzed, and that countries temporarily implemented expansionary fiscal policies for pragmatist purposes. After the countries had had expansionary fiscal policies, those countries started applying fiscal consolidations quickly. The citizens suffered from austerity policies.

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