The austerity question: ‘How’ is as important as ‘how much’

Alberto Alesina, Francesco Giavazzi 03 April 2012

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The European debate on fiscal austerity has gone astray – focusing exclusively on the size of deficit reductions. What policy makers should really be focusing on is the budget tightening’s composition (tax versus spending) and on the accompanying policies. Indeed, the title of this Vox debate – “Has austerity gone too far?” – reflects this inappropriate emphasis on size.

In our view, the essential question is not 'how far' governments go but of 'how' they go far enough.

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Topics:  Macroeconomic policy

Tags:  Eurozone crisis, fiscal austerity, Has Austerity Gone Too Far

The "Austerity Myth": Gain without pain?

Roberto Perotti,

Date Published

Mon, 11/14/2011

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EU policies Europe's nations and regions Macroeconomic policy

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http://www.cepr.org/DP8658

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growth, fiscal consolidation, Eurozone crisis, fiscal austerity, budget cuts

Germany spending is not the cure

Alberto Alesina, Roberto Perotti 17 June 2010

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A widely held view in Europe goes more or less as follows. After the shock of reunification, Germany has sought to enhance competitiveness through a variety of means. The policy was remarkably successful, turning the “sick man of Europe” into a highly competitive economy. One implication, however, was an imbalance with the rest of Europe. Germany’s current account surplus find its counterparts in, amongst other places, current account deficits in southern Europe, especially Spain, Portugal, and Greece.

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Topics:  EU institutions

Tags:  Germany, Keynesianism, fiscal austerity, Eurozone rescue

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