a column by Francesco Bianchi, Diego Comin, Howard Kung and Thilo Kind for VOX: CEPR’s Policy Portal
During the Great Recession, several European countries implemented fiscal austerity measures to reduce sovereign debt.
This column argues that such policies affect the decision to adopt new technologies and can have negative consequences for productivity and growth in the medium run. Thus, low technology adoption due to fiscal austerity can lead to slow recoveries. These, in turn, can make the fiscal stabilisation unnecessarily costly.
Fiscal austerity is desirable only if it is able to quickly reduce the cost of financing debt.
Continue reading
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment