Austerity advocates claim expansionary contraction is possible in the medium term.
Evidence
Undertaking the necessary austerity measures at an early stage … allowed the Baltics to benefit from positive confidence effects … allowed Latvia to return to the financial markets well ahead of schedule … allowed growth to bounce back after exceptionally severe output contractions. … The concept of “expansionary contraction” has been used and criticized in the ongoing debate about growth and austerity. The Baltic experience provides an indication that this need not be an oxymoron: even if fiscal consolidation weighs on the growth prospects in the short term, it has sizeable positive effects in the medium to long term. — Mark Blyth, Austerity, 592
Categorization
- DEFINE: ‘Expansionary contraction’ is the core intellectual claim that austerity can produce growth — worth pinning down precisely as the concept Blyth’s whole book is built to dismantle.
- XREF: This is the central intellectual target of Blyth’s argument about austerity’s history; connects directly to Mattei’s treatment of the fiscal-consolidation doctrine. — connects to: Expansionary-austerity theory traces directly to the 1981 German Council of Economic Advisors — Mark Blyth, Austerity: The History of a Dangerous…, 456; The Australian case for expansionary austerity rests on fabricated facts. — Mark Blyth, Austerity: The History of a Dangerous…, 568; Expectations-based expansionary austerity theory rests on Denmark and Ireland cases — Mark Blyth, Austerity: The History of a Dangerous…, 457 (+2 more)
Broader Connections
- The Australian case for expansionary austerity rests on fabricated facts.
#exemplifies(0.85) — Mark Blyth, Austerity, 568 - Expectations-based expansionary austerity theory rests on Denmark and Ireland cases
#qualifies(0.80) — Mark Blyth, Austerity, 457 - Expansionary austerity cases depend on conditions absent in the Eurozone
#qualifies(0.80) — Mark Blyth, Austerity, 483 - Expansionary-austerity theory traces directly to the 1981 German Council of Economic Advisors
#expands(0.75) — Mark Blyth, Austerity, 456 - Successful austerity required devaluation and boom timing, not fiscal contraction alone.
#qualifies(0.75) — Mark Blyth, Austerity, 503