Ireland Is Not An Example Of Expansionary Austerity

Europe is in the grip of austerity fever where all governments are convinced that reducing the budget deficit must be their main priority. However, despite the strong consensus, little thought has been given to whether or not it will work. Some economists have proposed that austerity could improve the economy if businesses and consumers believe are impressed by the government’s action and begin spending of their own. This is called “expansionary austerity” or “expansionary fiscal contraction”. Subsequent research has discredited all examples of expansionary austerity, with Ireland in 1987 being the only exception. But Ireland is no poster child for austerity, but just another example of the harm it does. Continue reading “Ireland Is Not An Example Of Expansionary Austerity”

Advertisements