The impact of alternative paths of fiscal consolidation on output and employment in the UK

Nitika Bagaria, Dawn Holland, Jonathan Portes, John Van Reenen, 14 August 2012

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In 2009-2010, the UK's budget deficit was about 11% of GDP (see here); there was no dispute among economists that a credible plan for fiscal consolidation was required.

Topics: Global crisis, Macroeconomic policy, Taxation
Tags: austerity, consolidation, Fiscal crisis, fiscal policy, global crisis, UK

How Euro economies are being choked by an accounting identity

Florence Pisani, Anton Brender, Emile Gagna, 21 June 2012

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By mid-2012 it is clear that the global recovery is at risk. By increasing uncertainty, while depressing demand in an important part of the world economy, the Eurozone crisis is dangerously slowing growth in the US and emerging economies. This is particularly worrying since the US economy could easily be pushed close to the recession zone.

Topics: EU policies, Macroeconomic policy
Tags: Eurozone crisis, Fiscal crisis

The Eurozone crisis: Fiscal fragility, external imbalances, or both?

Pietro Alessandrini, Andrew Hughes Hallett, Andrea F Presbitero, Michele Fratianni, 16 May 2012

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The speculative attack against Eurozone sovereign debt, reflected in the extraordinary rise in the yields of government bonds for Greece, Ireland, Italy, Portugal, and Spain (known affectionately as the GIIPS) since the start of 2010, has sparked a heated policy debate on how best to stabilise the Eurozone (see the Vox debate moderated by

Topics: EU policies
Tags: balance of payments, Eurozone crisis, Fiscal crisis

US debt issuance since 1951 and the fallacy of issuing floating rate notes

Peter Stella, Manmohan Singh, 14 May 2012

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Most of today’s debate turns on the amount of US debt issuance, but the nature of the debt is also under discussion. In the current environment of macroeconomic uncertainty, the demand for safe assets has bloomed and the definition of “safe” is evolving. Part of this is the debate on whether floating rate notes should be issued by the US Treasury.

Topics: Macroeconomic policy
Tags: Fiscal crisis, floating rate notes, public debt, US

Direct democracy as a safeguard to limit public spending

Patricia Funk, Christina Gathmann, 10 February 2012

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The current debt crisis in Europe and North America raises the question of how to impose spending discipline on governments and politicians. A country with historically low government spending is Switzerland, which many argue is related to the high use of direct democracy.

Topics: Europe's nations and regions, Politics and economics
Tags: democracy, Eurozone crisis, Fiscal crisis, Switzerland

Mispricing of sovereign risk and multiple equilibria in the Eurozone

Paul De Grauwe, Yuemei Ji, 23 January 2012

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It is widely acknowledged that Eurozone financial markets were systematically wrong from 2001 to 2008 when they charged the same risk premium on Greek and German government bonds despite huge differences in their debt-to-GDP ratios.

Topics: Europe's nations and regions, International finance
Tags: Eurozone crisis, Fiscal crisis, government bonds

Lessons from a century of large public debt reductions and build-ups

S. M. Ali Abbas, Nazim Belhocine, Asmaa El-Ganainy, Mark Horton, 18 December 2011

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Empirical work on debt cycles and debt sustainability has been constrained by lack of public debt data on a large number of countries over a long time period. Existing studies are based on datasets that either cover short time periods (such as Jaimovich and Panizza 2010) or omit a large number of countries (such as Reinhart and Rogoff 2010).

Topics: Global governance, Macroeconomic policy
Tags: Eurozone crisis, Fiscal crisis, public debt

Can austerity be self-defeating?

Daniel Gros, 29 November 2011

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Could ‘austerity’ be self-defeating? Could a reduction in government expenditure lead to such a strong fall in activity that fiscal performance indicators actually get worse?

Topics: Europe's nations and regions, Macroeconomic policy
Tags: austerity, Eurozone crisis, Fiscal crisis, UK

Chipping away at public debt – Sources of failure and keys to success in fiscal adjustment

Anna Ivanova, Paolo Mauro, Edouard Martin, 9 November 2011

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The global financial crisis has caused government debt to soar in the advanced economies. Public concern is rising and debates rage on how to fix the problem.

Topics: International finance, Politics and economics
Tags: Fiscal crisis, public debt

Public debt in the Eurozone, Japan, and the US

Charles Wyplosz, 16 September 2011

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There is little doubt that public debts have become outsized in many developed countries. Worse, they are expected to keep growing over the next decades as populations age. The financial markets have now set their eyes on this situation, making it difficult or expensive to borrow for a number of Eurozone countries, and the list could grow and expand beyond the Eurozone.

Topics: Global economy, Macroeconomic policy
Tags: debt, EU, Eurozone crisis, Fiscal crisis, Japan, US

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