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Public Sector Reform

Cutting Public Spending Promotes Economic Growth

The public debate on budget austerity is very far removed from the way this concept is defined and studied in economics. The term “austerity” is most often used to refer to an amalgam of budgetary and tax measures aiming to balance the budget, without differentiating between these measures and their varied effects. This Economic Note provides an overview of the contributions of academic research regarding the effectiveness of different ways of balancing the budget.

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