Daniel Gros, 29 November 2011

With European governments cutting back on spending, many are asking whether this could make matters worse. In the UK for instance, recent OECD estimates suggest that ‘austerity’ will lead to another recession, which in turn may lead to a higher debt-to-GDP ratio than before. As the debate heats up, this column provides some cool economic logic.

Alberto Alesina, Francesco Giavazzi, 13 September 2011

As Italy’s Prime Minister Silvio Berlusconi announces a new austerity bill based on tax rises, this column argues that the country’s leaders are in denial – it is as if they are trying to take aspirin to hide the symptoms of pneumonia. The authors predict that, with the current political class in power, Italy will soon enter another recession and, eventually, another crisis.

Hans-Joachim Voth, Jacopo Ponticelli, 10 August 2011

Governments cutting budget deficits have to consider not just the political reaction of the opposition and the media. A backlash on the streets, in the form of unrest and politically-motivated violence, is a real possibility. This column shows that since 1919, the level of instability has typically risen at the same time as budget cuts are implemented.

John Van Reenen, 07 March 2011

The recent announcement that Pfizer will close its main UK research lab (where Viagra was created) is the latest bit of bad news to bite the British economy. This column argues that the UK government’s austerity programme is only making growth prospects worse. Instead of Plan B, it says that the government needs the economic equivalent of Pfizer’s little blue pill – a “Plan V”.

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