Briefing

Is Fiscal Austerity Good for the Economy?


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;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2013

Issue: Sept