It is not just the election of François Hollande in France. Adopting contractionary fiscal policies in the teeth of a double-dip recession never made sense. And yet, public debts are high and markets in endemic panic. The solution must be based on a comprehensive analysis of the situation, not on arcane debates on the strength of the “confidence factor”.
The coming revolt against austerity
Charles Wyplosz, 2 May 2012
Fiscal consolidation: Too much of a good thing?
John Van Reenen, 27 April 2012
This week’s political events in the Netherlands and France which look likely to lead to government dissolution, have been interpreted as a set-back for the pace of fiscal consolidation in Europe with popular resentment punishing incumbent leaders (“Leaders in Austerity Backlash” was the headline of the Financial Times on 24 April 2012).
Is high public debt harmful for economic growth?
Ugo Panizza, Andrea F Presbitero, 22 April 2012
It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.
-- Mark Twain
Fiscal austerity and policy credibility
Marco Buti, Lucio R Pench, 20 April 2012
The renewed phase of tension in Europe, and the Eurozone in particular, since the second half of 2011, with the prospect of a double-dip recession alternating with that of a sovereign-debt crisis, has reignited the debate on fiscal austerity, to which European governments have been committed since the end of the most acute phase of the crisis in 2009.
The austerity debate: Festina lente!
Carlo Cottarelli, 20 April 2012
The austerity debate would not be as heated if commentators focused on the current state of the world economy, rather than on how economies work in normal times. If they did, they would see that a pragmatic approach – proceed with moderate adjustment, at a steady pace, if markets allow you to do so – is the best course of action.
Too early to sound the alarm
Manfred J M Neumann, 17 April 2012
Debt finance of public consumption has clearly gone too far in several countries. Too far in the sense that it has reached if not exceeded the borderline of sustainability. Have austerity measures meanwhile gone too far, too?
Has austerity gone too far?
Giancarlo Corsetti, 2 April 2012
Fiscal tightening is the watchword all across Europe. The measures adopted so far have not yet proved to be a cure-all for financial market concerns about debt sustainability. They have, however, coincided with renewed economic slowdown or even contraction. This brings into question the desirability of fiscal austerity.1
Fiscal consolidations for debt-to-GDP ratio containment? Maybe … but with much care
Gianluca Cafiso, Roberto Cellini, 20 March 2012
In recent time a wide debate has been developing concerning the effects of restrictive fiscal policies on the dynamics of the debt-to-GDP ratio (eg Corsetti and Müller 2012). The debate is nourished by the current experience of EU countries, where fiscal-consolidation policies are implemented.
Can austerity be self-defeating?
Daniel Gros, 29 November 2011
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?
The Italian situation: Clarification and a prediction
Alberto Alesina, Francesco Giavazzi, 13 September 2011
Under pressure from the bond market and the European Central Bank, Italy has adopted a budget that implies a sharp shift in fiscal stance.
- Fiscal consolidation: At what speed?Blanchard, Leigh
- Escaping liquidity traps: Lessons from the UK’s 1930s escapeCrafts
- The lessons of the North Atlantic crisis for economic theory and policyStiglitz
- Helicopter money as a policy optionReichlin, Turner, Woodford
- Rethinking macroeconomic policyBlanchard
- 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
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Reichlin, Baldwin, 14 April 2013
Reichlin, Turner, Woodford
CEPR Policy Research
- The "Greatest" Carry Trade Ever? Understanding Eurozone Bank RisksAcharya, Steffen
- Political Credit Cycles: The Case of the Euro ZoneFernández-Villaverde, Garicano, Santos
- Winning by Losing: Incentive Incompatibility in Multiple QualifiersDagaev, Sonin
- Income and schoolingBrückner, Gradstein
- Monetary Policy and Rational Asset Price BubblesGalí