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    The political economics of austerity

    Konzelmann, Suzanne J. (2014) The political economics of austerity. Cambridge Journal of Economics 38 (4), pp. 701-741. ISSN 0309-166X.

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    The 2007/8 financial crisis has reignited the debate about economic austerity. With the aim of understanding why a government would pursue such a policy in the current context of persistent economic recession, this article traces the social, political and economic developments that have together shaped the evolution of ideas about austerity, from the earliest theorizing by the Classical political economists some three hundred years ago. Throughout the historical narrative, important analytical themes revolve around the arguments used to justify austerity – notably appeals to ethics and morality (reinforced by misleading analogies drawn between government budgets and the accounts of firms and households). These include: concerns about inflation and the observed relationship between inflation and unemployment; ‘Ricardian equivalence’ and ‘non-Keynesian’ effects of austerity; and the correlation between public debt levels and economic growth. The class analytics of austerity – who bears the burden of austerity and who benefits – and the process by which alternative ideas penetrate the mainstream and reconstitute the conventional wisdom are also important analytical themes.


    Item Type: Article
    Additional Information: This is a pre-copyedited, author-produced PDF of an article accepted for publication in Cambridge Journal of Economics following peer review. The version of record is available online at
    Keyword(s) / Subject(s): Austerity, Macroeconomic Policy, Financial Crises, Business Cycles
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Research Centres and Institutes: Responsible Business Centre
    Depositing User: Sue Konzelmann
    Date Deposited: 22 Jan 2015 13:35
    Last Modified: 02 Aug 2023 17:14


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