De l'austérité budgétaire en période de récession

Contractionary budgetary policy is not the traditional government response to rising unemployment but it seems now to have become a common one for OECD governments irrespective of their political complexion. This changed attitude seems traceable to the almost universal growth in government sector deficits combined with the belief that such deficits will « crowd out » private sector investment. What is not generally recognised, though, is that « crowding out » can only occur if a restrictive monetary policy is pursued at the same time as government borrowing is increasing. The paper provides an assessment of the likely effects of budgetary policy which aims at reducing, or at least restraining, government sector deficits by deflating aggregate demand. An empirical examination of the evolution of government sector outlays shows that government sector deficits have become more and more sensitive to the state of economic activity because of a significant change in the composition of government sector outlays : the share of transfers has steadily increased with a matching decrease in the share of government outlays on goods and services. Consequently the pursuit of budget balance through increasing tax rates may be both destabilising and counterproductive, implying procyclical fiscal policy.