Front -- Contents -- Introduction -- Austere ideas for austere societies from Aristotle to Aquinas -- Austerity v. reason from Mandeville to Voltaire -- Austerity for capitalism from Smith to Weber -- Austerity for stability from the Great War to the next -- Austerity can wait Keynes --...

There is an ongoing debate about austerity and stimulus in the Euro zone. Moreover, given the fiscal and financial problems in the region, a default has appeared likely at times. In this context, this paper develops a dynamic stochastic quantitative model of sovereign default with fiscal policy,...