Austerity and the weak recovery

From Papadimitriou, Nikiforos, and Zezza's new Levy Strategic Analysis:
"over the last 25 years policymakers in Washington have become increasingly fiscally conservative. The current recovery is the only one in the postwar period during which government expenditure has decreased in real terms. Fiscal austerity, together with weak foreign demand, has put the entire burden of supporting aggregate demand on the private sector spending in excess of its income and borrowing. This has led to a rapid increase in the private sector debt-to income ratio in the United States."
Read full report here.

Comments

Popular posts from this blog

A brief note on Venezuela and the turn to the right in Latin America

Back of the envelope calculation: BNDES lending and the Marshall Plan