Successful austerity required devaluation and boom timing, not fiscal contraction alone.

Evidence

The critical point to note is that while there are a few positive instances of austerity leading to expansion among the legion of failures in this period, just as there were in the 1980s and 1990s, these episodes took place just after World War I, when the states in question, Germany and the United States foremost among them, were off the gold standard. As such, they could adjust their domestic costs by letting their exchange rate slide rather than through the forced internal deflation of domestic wages and prices. They were also implementing austerity at the height of the postwar boom. — Mark Blyth, Austerity, 503

Categorization

• XREF: This ‘austerity only works if you can devalue’ insight is the structural counterpart to the gold-standard mechanism central to Eichengreen’s account of the Depression and to Mattei’s analysis. — connects to: Denmark’s austerity cuts occurred during a boom, not a slump — Mark Blyth, Austerity: The History of a Dangerous…, 564; Alleged expansionary austerity episodes actually occurred during economic growth, not slumps. — Mark Blyth, Austerity: The History of a Dangerous…, 576; Austerity advocates claim expansionary contraction is possible in the medium term. — Mark Blyth, Austerity: The History of a Dangerous…, 592 (+2 more)
• SEED: Article angle: every famous ‘austerity worked’ case actually depended on exchange-rate flexibility and boom conditions, undercutting the expansionary austerity doctrine’s own evidence base.

Broader Connections

• Austerity is voluntary deflation achieved by cutting state budgets to restore competitiveness #corroborates (0.85) — Mark Blyth, Austerity, 25
• Fixed exchange rates force austerity when competitiveness declines #expands (0.80)