Publication

This paper argues that the belief that “austerity is killing growth in Europe” does not hold up to scrutiny. Since 2007, the economic performance of the US has been very similar to that of the eurozone: GDP per capita is today about 2% below the 2007 level on both sides of the Atlantic; and the unemployment rate has increased by 3% both in the US and the eurozone. Thus, over a five-year period, the US has not done any better than the eurozone despite a much larger dose of fiscal expansion.