ordering these consolidation strategies by multiplier size or their welfare consequences leads to very different rankings. With …

generate optimal policies that resemble "austerity" measures. Optimal policy prescribes front-loaded fiscal consolidations and …

This paper provides evidence that austerity shocks have long-run negative effects on GDP. Besides addressing the … reweighting in a local projections setup to account for the potential endogeneity of austerity policies and the non-linearity of … contractions larger than 3%. Evidence is also found linking austerity with smaller capital stock in the long-run. The results are …