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When Is Austerity Right?: In Boom, Not Bust

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  • Arjun Jayadev
  • Mike Konczal

Abstract

History shows that austerity does not work when economies are weakening. Some influential studies argue otherwise. These two writers show that the leading such study does not prove the point. If anything, the data show the very opposite. Do not try to cut deficits in recession or weak recovery.

Suggested Citation

  • Arjun Jayadev & Mike Konczal, 2010. "When Is Austerity Right?: In Boom, Not Bust," Challenge, Taylor & Francis Journals, vol. 53(6), pages 37-53.
    • Handle: RePEc:mes:challe:v:53:y:2010:i:6:p:37-53
    DOI: 10.2753/0577-5132530602
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    References listed on IDEAS

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    1. Alberto Alesina & Silvia Ardagna, 2010. "Large Changes in Fiscal Policy: Taxes versus Spending," NBER Chapters, in: Tax Policy and the Economy, Volume 24, pages 35-68, National Bureau of Economic Research, Inc.
    2. Christina D. Romer & David H. Romer, 2010. "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks," American Economic Review, American Economic Association, vol. 100(3), pages 763-801, June.
    3. Walsh, Brendan, 1993. "Credibility, Interest Rates and the ERM: The Irish Experience," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(4), pages 439-452, November.
    4. Brendan M. Walsh, 1993. "Credibility, interest rates and the ERM : the Irish experience, 1986-92," Working Papers 199301, School of Economics, University College Dublin.
    5. Braconier, Henrik & Holden, Steinar, 1999. "The Public Budget Balance - Fiscal Indicators and Cyclical Sensitivity in the Nordic Countries," Working Papers 67, National Institute of Economic Research.
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    Cited by:

    1. Robert Pollin, 2010. "Austerity Is Not a Solution," Challenge, Taylor & Francis Journals, vol. 53(6), pages 6-36.
    2. Layna Mosley & Victoria Paniagua & Erik Wibbels, 2020. "Moving markets? Government bond investors and microeconomic policy changes," Economics and Politics, Wiley Blackwell, vol. 32(2), pages 197-249, July.
    3. Stiglitz, Joseph E., 2016. "America's Great Malaise and what to do about it," Journal of Policy Modeling, Elsevier, vol. 38(4), pages 639-648.
    4. Christos Pierros, 2021. "Assessing the internal devaluation policy implemented in Greece in an empirical stock‐flow consistent model," Metroeconomica, Wiley Blackwell, vol. 72(4), pages 905-943, November.
    5. Joseph E. Stiglitz, 2016. "How to Restore Equitable and Sustainable Economic Growth in the United States," American Economic Review, American Economic Association, vol. 106(5), pages 43-47, May.

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