John Fender is Professor of Macroeconomics and leader of the Macroeconomics and Finance Research Group at the University of Birmingham. His books include Understanding Keynes, Inflation: A Contemporary Perspective and Monetary Policy.

1. Introduction

2. The economics of austerity I

3. The economics of austerity II

4. The term structure of interest rates

5. A simple model

6. Austerity in the United Kingdom

7. Austerity in the eurozone

8. Austerity in the rest of the world

9. The optimal time path of government debt (or how should fiscal policy be conducted?)

10. Policy in a world where severe deflationary shocks are possible

11. Conclusion: when are austerity measures necessary or desirable?