The austerity debate turns on a central economic logic – how does fiscal policy affect output? This is a tricky question since declining output can affect fiscal policy just as much as fiscal policy can affect growth. Governments, after all, don’t make policy in a vacuum.
Output effects of fiscal consolidations
Carlo Favero, Francesco Giavazzi, 7 September 2012
Fiscal consolidation and reforms: Substitutes, not complements
Coen Teulings, 13 September 2012
Many OECD countries suffer from high sovereign debts. Sooner or later, this problem must be addressed. That will require some form of fiscal retrenchment.
Rethinking austerity: Introducing a new Vox eCollection
Giancarlo Corsetti, 23 June 2012
Even as the first Vox eCollection is going online, the global economy is being shaken by events ranging from a Chinese economic slowdown to the possibility of a delayed Greek Eurozone exit.
A tale of two overhangs: The nexus of financial sector and sovereign credit risks
Viral Acharya, Philipp Schnabl, Itamar Drechsler, 15 April 2012
From 2007 to 2010, the Irish public debt-to-GDP ratio rose roughly 20% annually, taking it from among the lowest among OECD countries in 2007 (25%) to among the highest in 2010 (96%).
What can Europe learn from Sweden? Four lessons for fiscal discipline
Lars Calmfors, 12 March 2012
Several Eurozone countries are currently struggling with acute fiscal crises (eg Corsetti and Müller 2012). At the same time, the new fiscal compact is an attempt to beef up fiscal frameworks for the future.
The ECB’s trillion euro bet
Charles Wyplosz, 13 February 2012
With immense modesty, the President of the ECB Mario Draghi is giving the credit for falling spreads on Eurozone government debt to the courageous reforms announced in a number of countries, especially those where former academic economists act as prime ministers. Oh, how we would love to buy Mario Draghi’s interpretation!
The unexplained part of public debt
Camila FS Campos, Dany Jaimovich, Ugo Panizza, 17 January 2012
The answer to the question “How do countries get into debt?” seems trivial. The stock of debt is equal to the sum of past budget deficits. Countries accumulate debt whenever they run a budget deficit and reduce their debt when they run a budget surplus.
The global saving glut will hold bond yields down
Heleen Mees, 8 August 2011
The saving glut theory has gone out of fashion – unjustly so. In spite of twin financial crises looming on either side of the Atlantic, US Treasury and German Bund yields have declined in recent weeks. This can be explained by not only the dismal economic growth of the US economy in the first semester of 2011, but also the unrelenting build-up in total debt securities outstanding.
Is Greece different? Adjustment difficulties in southern Europe
Daniel Gros, Cinzia Alcidi, 22 April 2010
The Southern members of the Eurozone are often lumped together because they all have overvalued currencies and twin deficits – fiscal and external current account (De Grauwe 2010).
- The case for 4% inflationBall
- Helicopter money as a policy optionReichlin, Turner, Woodford
- The banking crisis as a giant carry trade gone wrongAcharya, Steffen
- Everything the IMF wanted to know about financial regulation and wasn’t afraid to askBair
- Rethinking macroeconomic policy: Getting granularBlanchard, Dell'Ariccia, Mauro
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
Baldwin, Kawai, Wignaraja, 11 June 2013
Giavazzi, Portes, Weder di Mauro, Wyplosz
Reichlin, Turner, Woodford