Is Austerity Necessary?

Economists and politicians argue furiously over whether fiscal consolidation deepens a recession or in fact the reverse policy, failure to reduce public sector debt, inhibits recovery. Even most Keynesians however believe that high long-term debt is unsustainable and the question therefore is over the timing of fiscal consolidation. As can be seen in previous case studies in this book, there are examples of both scenarios. In this chapter, Michael Burton looks at various studies of austerity to see if there is a consensus over responding to downturns and whether there is a template which can be applied. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.