Is austerity self-defeating? Is it keeping Europeans underemployed for years and destroying the very growth needed to pay off the debt? Or is it steering nations clear of Greek-like tragedies? So starts a new debate on Vox on austerity, introduced in this column.
Giancarlo Corsetti, Monday, April 2, 2012
Gianluca Cafiso, Roberto Cellini, Tuesday, March 20, 2012
As fiscal-consolidation policies are being implemented across the EU, a debate has been developing concerning the effects of such policies on the dynamics of the debt-to-GDP ratio. This column examines past episodes and finds that following fiscal adjustment may have favourable effects in the short term but that the two-year cumulated changes have been mainly adverse.
Daniel Gros, Tuesday, November 29, 2011
With European governments cutting back on spending, many are asking whether this could make matters worse. In the UK for instance, recent OECD estimates suggest that ‘austerity’ will lead to another recession, which in turn may lead to a higher debt-to-GDP ratio than before. As the debate heats up, this column provides some cool economic logic.
Alberto Alesina, Francesco Giavazzi, Tuesday, September 13, 2011
As Italy’s Prime Minister Silvio Berlusconi announces a new austerity bill based on tax rises, this column argues that the country’s leaders are in denial – it is as if they are trying to take aspirin to hide the symptoms of pneumonia. The authors predict that, with the current political class in power, Italy will soon enter another recession and, eventually, another crisis.
Hans-Joachim Voth, Jacopo Ponticelli, Wednesday, August 10, 2011
Governments cutting budget deficits have to consider not just the political reaction of the opposition and the media. A backlash on the streets, in the form of unrest and politically-motivated violence, is a real possibility. This column shows that since 1919, the level of instability has typically risen at the same time as budget cuts are implemented.
John Van Reenen, Monday, March 7, 2011
The recent announcement that Pfizer will close its main UK research lab (where Viagra was created) is the latest bit of bad news to bite the British economy. This column argues that the UK government’s austerity programme is only making growth prospects worse. Instead of Plan B, it says that the government needs the economic equivalent of Pfizer’s little blue pill – a “Plan V”.