Is Fiscal Austerity Good for the Economy?

Renee Courtois Haltom and Thomas Lubik

Richmond Fed Economic Brief, 2013, issue Sept

Abstract: Concerns about fiscal imbalances in Europe and the United States have led to intense debates about whether governments should dramatically cut spending or increase taxes to reduce government debt ? a course of action often called fiscal "austerity." But is austerity likely to hurt economic growth? That question has not been definitively answered ? but even if austerity is costly in the short run, it may provide long-run benefits.

Keywords: Economic Growth; Fiscal Policy (search for similar items in EconPapers)
Date: 2013
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