John Van Reenen, 15 September 2012

John Van Reenen talks to Viv Davies about fiscal consolidation during a depression. They discuss Van Reenen's recent work on quantifying the costs and benefits of delaying austerity measures until recovery is clearly established. They also discuss whether austerity has gone too far. Van Reenen presents the case for a more federal Europe. The interview was recorded at the LSE on 13 September 2012.

John Van Reenen, 27 April 2012

Many policymakers in Europe seem to stick to the idea that fiscal consolidation might inspire confidence and help the economy to grow. This column argues these sentiments may be understandable but are basically wrong. For countries like the UK where borrowing is relatively cheap and sovereign default unlikely, slowing down the pace of fiscal consolidation would be a rational response. The obsession over the fiscal stance is a distraction from sustainable long-run growth.

Javier Andrés, Rafael Doménech, 07 April 2012

Macroeconomic developments in Europe cast doubt on fiscal-consolidation strategies. This column examines the pace of consolidation in the Spanish 2011–14 Stability Programme. It shows that if Spain were to meet the deficit targets, it would be bringing forward by seven years the zero structural-deficit target that will be mandatory as of 2020, according to the new Spanish legislation.

Marco Buti, Pier Carlo Padoan, 27 March 2012

In late 2011, the financial crisis had evolved dangerously into a vicious circle of sluggish growth, tensions in sovereign debt markets, and banking sector fragility. CEPR Policy Insight No. 61 looks at what measures are required to turn the economy around.

Marco Buti, Pier Carlo Padoan, 27 March 2012

The economic and financial crisis in the Eurozone is in its fourth year. This column argues that, by providing a confidence bridge, decisive and credible policy action can turn the economy around and bring it towards a good equilibrium of debt sustainability and sustainable growth.

Leonard Burman, Marvin Phaup, 17 November 2011

As the US tries to cut back its debt, the battle lines are already being drawn. Republicans are in favour of spending cuts; Democrats in favour of tax rises. Putting political ideology to one side, this column asks what objective economics has to say.

Roberto Perotti, 14 November 2011

With crisis plaguing the Eurozone and austerity the favoured prescription for diseased EZ economies, some are asking: Can big fiscal consolidations, especially those based on cuts, actually restart growth? CEPR DP8658 examines four episodes of past fiscal consolidations in European countries and evaluates the evidence.

Jesús Fernández-Villaverde, Juan Rubio-Ramirez, Pablo Guerron-Quintana, 07 November 2011

The authors of CEPR DP8642 offer a reminder about the usefulness of supply-side policies when the constraints of fiscal consolidation and the zero lower bound limit the macroeconomic-policymaking toolbox. A wealth effect from supply-side reforms could boost aggregate demand and help pull an economy out of the doldrums.

Olivier Blanchard, 05 November 2010

Olivier Blanchard, economic counsellor at the IMF, talks to Romesh Vaitilingam about the two ‘rebalancing acts’ needed for a strong global recovery and the particular challenges facing the US, Europe and the emerging market economies. He also discusses fiscal consolidation, financial reform and ‘currency wars’. The interview was recorded on 4 November 2010 at the Centre for Economic Performance in London, where Blanchard was delivering a special lecture on ‘The State of the World Economy’. [Also read the transcript]

Salvador Barrios, Sven Langedijk, Lucio R Pench, 02 October 2010

Europe’s policymakers are trying to balance fiscal consolidation with economic recovery. This column examines financial crises in EU and OECD countries from 1970 to 2008 and finds that countries facing high debt levels or those at risk of low GDP growth would be better off with quick, “cold-shower” fiscal consolidations. Other countries might benefit from a more gradual approach.

Olivier Blanchard, Carlo Cottarelli, 28 June 2010

The G20 communiqué stresses the difficulty of balancing fiscal stimulus and fiscal consolidation. This column – written by one of the world’s leading macroeconomists, Olivier Blanchard, and his co-author – sums up the research-based policy analysis of the issue.

Giancarlo Corsetti, 17 June 2010

The Eurozone crisis is forcing fiscal retrenchments across Europe. The challenge is to reassure financial markets about debt sustainability without resorting to budget cuts and tax hikes that kill the recovery. This essay argues that quick corrections may be important signals of the government’s determination on fiscal discipline, but they are not sufficient. True sustainability must be based on policies that have lasting effects; a gradual implementation of spending cuts is probably the best strategy.

Domingo Cavallo, Joaquín Cottani, 07 May 2010

Greek debt woes could spark contagion within and beyond Europe. Argentina’s former finance minister and co-author draw four lessons from Argentina’s crisis: devaluation/exit is not the answer; orderly debt restructuring involving a ‘Brady Plan’ now is better than a disorderly one later; fiscal consolidation that improves external competitiveness is a must; all these must be done simultaneously

Tito Boeri, 03 August 2008

Italy may be headed for recession. The government's fiscal position would allow it to use prudent tax cuts to prevent recession, but its new budget plan only signals trouble.



CEPR Policy Research