Expansionary Austerity?: In a terrific new working paper, MIke Konczal and Arjun Jayadev look under the hood of an Alesina/Ardagna paper that is being widely cited as evidence that austerity will lead to growth. They look to see how many of the austerity -> growth episodes actually involve fiscal contraction in a slump. Here’s a comprehensive list of those cases:
And as I among others have noted, the things that drove Irish expansion — devaluation, a boom in its largest trading partner, and a sharp fall in interest rates — have no relevance to the United States today...