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Austerity in the Aftermath of the Great Recession / Christopher L. House, Christian Proebsting, Linda L. Tesar.
- Format:
- Book
- Author/Creator:
- House, Christopher L.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w23147.
- NBER working paper series no. w23147
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2017.
- Summary:
- We examine austerity in advanced economies since the Great Recession. Austerity shocks are reductions in government purchases that exceed reduced-form forecasts. Austerity shocks are statistically associated with lower real GDP, lower inflation and higher net exports. We estimate a cross-sectional multiplier of roughly 2. A multi-country DSGE model calibrated to 29 advanced economies generates a multiplier consistent with the data. Counterfactuals suggest that eliminating austerity would have substantially reduced output losses in Europe. Austerity shocks were sufficiently contractionary that debt-to-GDP ratios in some European countries increased as a consequence of endogenous reductions in GDP and tax revenue.
- Notes:
- Print version record
- February 2017.
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