When is it a mistake and when is it necessary?

John Fender

£55.00  |  $70.00
ISBN 9781911116929
£16.00  |  $25.00
ISBN 9781911116936
£16.00  |  $25.00
ISBN 9781911116943
144 pages   |  216 x 138mm   |  10 September 2020


"This book is extremely timely. Moreover, its balanced and clear-headed approach is a valuable antidote to the kind of emotive discussion that has dominated the debate over the past ten years." – Tim Besley, London School of Economics

“A concise, thoughtful, and temperate guide ... I warmly recommend it.”  – Society of Professional Economists Reading Room


Austerity has dominated economic debate since the financial crisis of 2008. Governments have implemented austerity policies by reducing their spending on goods and services, increasing taxation and cutting welfare budgets.

John Fender explains how austerity (or "fiscal consolidation") works in theory and how it has played out in practice especially in the UK and the eurozone. He provides a clear and rigorous guide to the principles and mechanisms of austerity economics and offers a balanced account of the economic thinking behind contentious policy decisions.

Boris Johnson has said that the UK government "has absolutely no intention of returning to the 'A-word'", but with the Covid-19 crisis likely to result in much more government debt, it will be difficult to avoid more austerity. Understanding the impact of austerity policies is more important than ever and this book offers a first step on that path. For anyone seeking answers to such questions as: "What can we learn from the UK’s economic history that is relevant to current policy?", "Is austerity ever necessary or desirable?" and "Can the harmful effects of austerity programmes be mitigated?" then this book will be welcome reading.


1. Introduction
2. The economics of austerity I
3. The economics of austerity II
4. The term structure of interest rates
5. A simple model
6. Austerity in the United Kingdom
7. Austerity in the eurozone
8. Austerity in the rest of the world
9. The optimal time path of government debt (or how should fiscal policy be conducted?)
10. Policy in a world where severe deflationary shocks are possible
11. Conclusion: when are austerity measures necessary or desirable?

Author Information

John Fender is Professor of Macroeconomics and leader of the Macroeconomics and Finance Research Group at the University of Birmingham. His books include Understanding Keynes, Inflation: A Contemporary Perspective and Monetary Policy.

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