Will it hurt? The effects of fiscal austerity
Presentation by Daniel Leigh, International Monetary Fund, and Podium Discussion
 |
October 15, 2010
12:30-2:00 p.m.
For the second time, ESMT hosted the International Monetary Fund (IMF) for a presentation of Chapter 3 of the World Economic Outlook (WEO). This time the speaker was Daniel Leigh of the IMF describing the macroeconomic effects of fiscal consolidation.
Leigh pointed out that, whereas studies using a standard approach, could not detect any effects of fiscal consolidation on the economic performance of a country, the WEO using a historical approach came to different results.
According to IMF, fiscal consolidations are contractionary: GDP falls and unemployment rates rise in the short term: fiscal austerity does hurt, at least at first. But Leigh also emphasized that consolidation still has to be done so as not to lose the gains it holds like a long-term growth of the economy.
The presentation and subsequent discussion with ESMT Full Professor and Lufthansa Chair in Competition and Regulation Paul Heidhues was moderated by Marcus Walker from the Wall Street Journal.
About the speaker
Daniel Leigh
Daniel Leigh is an Economist at the Research Department of the IMF. While at the IMF, he also worked on a number of countries, including Hungary, Lithuania, Gabon, Colombia, and Peru. His research interests fall in the general field of international macroeconomics. He has publications in Economic Policy, the Journal of Money, Credit and Banking, and the Journal of Economic Dynamics and Control. He holds a Ph.D. in Economics from Johns Hopkins University, and a M.Sc. in Economics from the London School of Economics.
ESMT European School of