Austerity or Stimulus? What We Need Is Growth

Austerity isn’t working in Europe.

Greece is collapsing, Italy and Spain’s output is declining, and even Germany and the U.K. are slowing down. In addition to their direct economic costs, these “austerity” measures aren’t even swiftly closing budget gaps. As incomes decline, tax revenue drops, and it becomes harder to cut spending. A downward spiral looms.

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CONTRIBUTOR
AQR Capital Management Professor of Finance

RESEARCH INTERESTS
Asset Pricing
Stock and Bond Markets
Liquidity Premiums
Stock Prices and Business Cycles
Effects of Monetary Policy