{"id":2261,"date":"2011-10-31T14:12:49","date_gmt":"2011-10-31T18:12:49","guid":{"rendered":"http:\/\/www.multiplier-effect.org\/?p=2261"},"modified":"2011-10-31T14:12:49","modified_gmt":"2011-10-31T18:12:49","slug":"austerity-still-not-expansionary","status":"publish","type":"post","link":"https:\/\/blogs.bard.edu\/multiplier-effect\/austerity-still-not-expansionary\/","title":{"rendered":"Austerity Still Not Expansionary"},"content":{"rendered":"<p>At Eurointelligence, <a href=\"http:\/\/www.levyinstitute.org\/scholars\/?auth=363\">Rob Parenteau<\/a> digs into a recently-leaked &#8220;Troika&#8221; (the IMF, European Central Bank, and European Commission) document that discusses the outlines of a Greek debt restructuring deal.\u00a0 Among the revelations Parenteau extracts from the document is evidence of a growing willingness to concede that fiscal consolidation is not expansionary.\u00a0 As Parenteau comments:<\/p>\n<blockquote><p>In 2009 and 2010, citizens across the eurozone were sold large, multi-year tax hikes and government spending cuts on the idea that [expansionary fiscal consolidations] are commonplace and achievable, and besides, balanced fiscal budgets are a sign of prudence and moral purity. In fact, a closer inspection of history suggests <strong>fiscal consolidation will tend to be expansionary only under fairly special conditions<\/strong>, namely when accompanied by <strong>a) a fall in the exchange rate that improves the contribution of foreign trade to economic growth, and b) a fall in interest rate levels that improves interest rate sensitive spending by households and firms<\/strong>.<\/p>\n<p>Notice that <strong>neither of these special conditions are automatic, and neither of them have been present in the eurozone of late<\/strong>.<\/p><\/blockquote>\n<p>Read the whole article, including a link to the leaked document, <a href=\"http:\/\/www.eurointelligence.com\/eurointelligence-news\/comment\/singleview\/article\/fiscal-consolidation-is-not-expansionary-after-all.html\">here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>At Eurointelligence, Rob Parenteau digs into a recently-leaked &#8220;Troika&#8221; (the IMF, European Central Bank, and European Commission) document that discusses the outlines of a Greek debt restructuring deal.\u00a0 Among the revelations Parenteau extracts from the document is evidence of a growing willingness to concede that fiscal consolidation is not expansionary.\u00a0 As Parenteau comments: In 2009 [&hellip;]<\/p>\n","protected":false},"author":202,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15,49],"tags":[],"class_list":["post-2261","post","type-post","status-publish","format-standard","hentry","category-eurozone-crisis","category-fiscal-policy"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/2261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/users\/202"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/comments?post=2261"}],"version-history":[{"count":8,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/2261\/revisions"}],"predecessor-version":[{"id":2300,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/2261\/revisions\/2300"}],"wp:attachment":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/media?parent=2261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/categories?post=2261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/tags?post=2261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}