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Adjusting to a credit cycle bust: The role of fiscal policy. CEPS Commentary, 27 July 2012

Gros, Daniel (2012) Adjusting to a credit cycle bust: The role of fiscal policy. CEPS Commentary, 27 July 2012. [Policy Paper]

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    Abstract

    In response to the often-heard accusation that “austerity is killing growth in Europe”, Daniel Gros asks in this new Commentary: “What austerity?” Looking at the entire budget cycle, he finds that the picture of austerity killing growth simply does not hold up. Since the bursting of the bubble in 2007, Gros reports that the economic performance of the US has been very similar to that of the euro area: GDP per capita is today about 2% below the 2007 level on both sides of the Atlantic; and the unemployment rate has increased by about the same amount as well: it increased by 3% both in the US and the euro area. Thus, he concludes that over a five-year period, the US has not done any better than the euro area although it has used a much larger dose of fiscal expansion.

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > External relations > EU-US
    EU policies and themes > Policies & related activities > economic and financial affairs > fiscal policy
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on and consequences/reforms
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Commentaries
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 12 Aug 2012 14:03
    Number of Pages: 2
    Last Modified: 17 Jul 2014 21:11
    URI: http://aei.pitt.edu/id/eprint/36063

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