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Federal Reserve Bank of Richmond
Richmond Fed Economic Brief
Is Fiscal Austerity Good for the Economy?
Renee Courtois Haltom
Thomas A. Lubik

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.

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Renee Courtois Haltom & Thomas A. Lubik, "Is Fiscal Austerity Good for the Economy?" , Federal Reserve Bank of Richmond, Richmond Fed Economic Brief, issue Sept, pages 1-5, 2013.
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Keywords: Economic Growth; Fiscal Policy
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