Includes bibliographical references (pages 259-266) and index.

Introduction. Austerity ; Four contributions of this book ; The punchline in a nutshell -- Theory. The simple Keynesian model ; The future ; Confidence and uncertainty ; Austerity and the business cycle ; Multiyear plans ; Incentives and the supply side ; Accompanying policies -- Expansionary and recessionary austerity up to the financial crisis of 2008. Expansionary austerity ; Recessionary austerity -- Measuring the effects of fiscal policy. The empirical evidence ; Multipliers during austerity: the early literature ; The narrative approach -- Fiscal plans. Constructing fiscal plans ; Measuring the effects of fiscal plans -- The data. Introduction: A broad look at our data ; The data in more detail ; Other data and sources -- The effects of austerity. Taxes versus expenditures ; The role of accompanying policies ; An alternative specification ; Why do EB and TB plans have different effects? -- 8 European austerity during the great recession. Europe in the aftermath of the financial crisis -- European austerity ; Evaluating European austerity in 2010-14 ; The Greek tragedy ; Did fiscal multipliers change after the crisis? -- When austerity? Fiscal policy in booms and recessions ; "How" and "when" ; The "when" and the how " together ; Austerity at the zero lower bound -- Austerity and elections. Existing evidence ; Fiscal plans and elections ; A few examples -- The models in our book: a user's guide. Why simulating models? a simple example ; Our empirical models: an overview ; The models used in the literature to measure multipliers ; The models in Chapter 7 ; Fiscal adjustments and the dynamics of debt over GDP ; TB versus EB austerity in a general equilibrium model -- Reconsidering Blanchard and Leigh (2014) in chapter 8 ; The model of "How" and "when" in chapter 9 ; Who adjusts and who wins: more details on the model for chapter 10.

Fiscal austerity is hugely controversial. Opponents argue that it can trigger downward growth spirals and become self-defeating. Supporters argue that budget deficits have to be tackled aggressively at all times and at all costs. In this masterful book, three of today's leading policy experts cut through the political noise to demonstrate that there is not one type of austerity but many. Looking at thousands of fiscal measures adopted by sixteen advanced economies since the late 1970s, "Austerity" assesses the relative effectiveness of tax increases and spending cuts at reducing debt. It shows that spending cuts have much smaller costs in terms of output losses than tax increases. Spending cuts can sometimes be associated with output gains in the case of expansionary austerity and are much more successful than tax increases at reducing the growth of debt. The authors also show that austerity is not necessarily the kiss of death for political careers as is often believed, and provide new insights into the recent cases of European austerity after the financial crisis. Bringing needed clarity to one of today's most challenging subjects, "Austerity" charts a sensible approach based on data analysis rather than ideology.