Budget consolidation and macroeconomic employment: Job miracle despite austerity package

Abstract

"The austerity package adopted by the German Federal Government in early summer partially provoked hefty discussion. One of the criticisms was that the Governments saving programme would 'ruin' the economic upturn, and in particular the buildup in employment. An analysis of the facts shows that this criticism is unfounded: the intended budget consolidation will at worst have a slight negative influence on the development of the economy and the labour market for a short period of time; in the long run, the reduction of national debt is likely to wield a positive effect on the development of macroeconomic employment." (Author's abstract, IAB-Doku) ((en))

Cite article

Feil, M. & Walwei, U. (2010): Haushaltskonsolidierung und gesamtwirtschaftliche Beschäftigung: Jobwunder trotz Sparpaket. In: IAB-Forum No. 2, p. 60-65. DOI:10.3278/IFO1002W060