Okuzeka
Economics vocabulary · Fiscal Policy and Public Finance

Austerity

Meaning in economics, with examples

/ɒˈsterəti/nounCommon term

In economics, austerity means: A policy of sharply cutting government spending, and sometimes raising taxes, in order to reduce a budget deficit or public debt.

In Turkish: kemer sıkma, kemer sıkma politikası

How it is used

Often heard in debates about Europe after the 2008 crisis and the euro area debt crisis. Governments impose or introduce austerity measures; critics argue that austerity can deepen recessions, while supporters say it restores confidence. Usually uncountable.

Example sentences

  1. Several European governments introduced austerity measures after the debt crisis.

  2. Years of austerity left little money for new roads and schools.

Common collocations

  • austerity measures
  • a period of austerity
  • impose austerity
  • austerity budget
  • anti-austerity
  • government spendingMoney that the state spends on public services, investment, salaries and social payments such as pensions; a key tool of fiscal policy.
  • budget deficitThe gap that appears when a government spends more than it collects in taxes and other revenue during a year; it is usually covered by borrowing.
  • public debtThe total amount of money that a government owes to lenders at home and abroad, built up over years of borrowing.
  • fiscal policyThe government's decisions about taxes and public spending, used to influence demand, growth, jobs and the state of the public finances.
  • stimulusExtra government spending, tax cuts or central bank support designed to increase demand and lift a weak economy.

More terms: Fiscal Policy and Public Finance

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This page explains English vocabulary for learners. It is not financial advice.