Austerity works in the sense of reducing deficits and no longer digging a fiscal hole. It is something which happens eventually after a country runs out of creditors who don't demand austerity as a precondition.
Austerity does seems to perform inferior to stimulus but not everyone can afford it. Stimulus being unavailable is itself a statement of lack of faith in existing plans. Austerity is hard to screw it up in the same sense it is hard to screw up losing weight in a Gulag. Hence why lenders of last resort insist upon it as a precondition.
Austerity works in the sense of reducing deficits and no longer digging a fiscal hole. It is something which happens eventually after a country runs out of creditors who don't demand austerity as a precondition.
Austerity does seems to perform inferior to stimulus but not everyone can afford it. Stimulus being unavailable is itself a statement of lack of faith in existing plans. Austerity is hard to screw it up in the same sense it is hard to screw up losing weight in a Gulag. Hence why lenders of last resort insist upon it as a precondition.