Smaghi, L.B., (2013), “Austerity and Stupidity”, VoxEU, 06 November.
Today’s austerity, many argue, is stupid. This column argues that today’s EZ austerity may arise from stupidity before the crisis – specifically lacklustre structural reform. Excess debt arose in nations maintaining unsustainable living standards and welfare systems in the face of poor growth. The Crisis forced radical adjustments such as austerity in a recession. It’s not austerity which caused low growth, but low pre-Crisis growth which ultimately caused austerity. The way out of austerity is fundamental pro-growth reforms that create room for more gradual fiscal adjustment.
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Relevant Posts
- Tamborini, R., (2013), “Austerity and Growth: Dispelling Confusion with Some Facts”, EconoMonitor, 24 October.
- Traynor, I., (2013), “Crisis over in the eurozone? Not in the real world”, The Guardian, 09 October.
- De Grauwe, P. and Ji, Y., (2013), “The Legacy of Austerity in the Eurozone”, Centre for European Policy Studies, 04 October.
- Wren-Lewis, S., (2013), “The ‘Official’ Cost Of Austerity”, Social Europe Journal, 29 October.