“Austerian” economics: Does the Vienna school favor fiscal deficit reduction even in a subpar economy?
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Does the economic analysis associated with the modern Austrian school favor a policy of restraining the government’s fiscal deficit even in a subpar economy, as suggested by those who (pejoratively) label such a policy “austerian”? Because resources are not superabundant even in a subpar economy, the answer is yes, unless (implausibly) the return on the last (lowest-payoff) dollar of government expenditure exceeds the return on private investment.
KeywordsAusterian Austerity Austrian Fiscal deficit Free lunch Hayek Keynes Mises Multiplier Ricardian equivalence
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