Austerity and the Origins of Public Debt
Description
The COVID-19 pandemic is inflicting unprecedented damage to economies worldwide. Governments have responded by providing massive sums of relief aid and launching a wide range of assistance programs. In several countries, the post-pandemic debt-to-GDP ratio will likely be two to three times larger than at the height of the 2008 global financial crisis. The massive shortfall in governments' coffers will necessitate significant measures to reduce the public debt and no doubt fuel political debates over the desirability of austerity. What policies are voters willing to back in order to deal with the unprecedented public debt incurred during the pandemic? To what extent does the response of individuals to the economic hardships induced by the pandemic differ from those resulting from "traditional" sources of financial crises? What can we learn from the dynamics of past crises about the politics of austerity and fiscal retrenchment in the aftermath of COVID19?
Team
Michael M. Bechtel – University of Cologne
Kirk Bansak – University of California, Berkeley
Yotam Margalit – Tel Aviv University
Funding
Funded by the German Research Foundation under Germany's Excellence Strategy – EXC 2126/1– 390838866.