Changes

==Origin==

==Origin==

[https://nordan.daynal.org/wiki/index.php?title=English#ca._1100-1500_.09THE_MIDDLE_ENGLISH_PERIOD Middle English], from Anglo-French, from [[Latin]] austerus, from [[Greek]] austēros harsh, severe; akin to Greek hauos dry  

[https://nordan.daynal.org/wiki/index.php?title=English#ca._1100-1500_.09THE_MIDDLE_ENGLISH_PERIOD Middle English], from Anglo-French, from [[Latin]] austerus, from [[Greek]] austēros harsh, severe; akin to Greek hauos dry  

*[http://en.wikipedia.org/wiki/14th_century 14th Century]

*[https://en.wikipedia.org/wiki/14th_century 14th Century]

==Definitions==

==Definitions==

In [[economics]], '''austerity''' is when a [[government]] reduces its spending and/or increases user fees and taxes to pay back creditors. Austerity is usually required when a [[government]]'s fiscal deficit spending is believed to be unsustainable.

In [[economics]], '''austerity''' is when a [[government]] reduces its spending and/or increases user fees and taxes to pay back creditors. Austerity is usually required when a [[government]]'s fiscal deficit spending is believed to be unsustainable.

==Reasons for taking austerity measures==

==Reasons for taking austerity measures==

Austerity measures are typically taken if there is a [[perceived]] threat that [[government]] cannot [[honor]] its [[debt]] liabilities. Such a situation may arise if a government has borrowed in foreign currencies which they have no right to issue or they have been legally forbidden from issuing their own [[currency]]. In such a situation banks may lose [[trust]] in [[government]]'s [[ability]] and/or willingness to pay and refuse to roll over existing [[debts]] or demand exorbitant interest rates. In such situations, inter-governmental [[institutions]] such as the [http://en.wikipedia.org/wiki/International_Monetary_Fund International Monetary Fund] (IMF) typically come in and demand austerity [[measures]] in exchange for functioning as a lender of last resort. When the IMF requires such a [[policy]], the terms are known as 'IMF conditionalities'.

Austerity measures are typically taken if there is a [[perceived]] threat that [[government]] cannot [[honor]] its [[debt]] liabilities. Such a situation may arise if a government has borrowed in foreign currencies which they have no right to issue or they have been legally forbidden from issuing their own [[currency]]. In such a situation banks may lose [[trust]] in [[government]]'s [[ability]] and/or willingness to pay and refuse to roll over existing [[debts]] or demand exorbitant interest rates. In such situations, inter-governmental [[institutions]] such as the [https://en.wikipedia.org/wiki/International_Monetary_Fund International Monetary Fund] (IMF) typically come in and demand austerity [[measures]] in exchange for functioning as a lender of last resort. When the IMF requires such a [[policy]], the terms are known as 'IMF conditionalities'.

==Typical effects==

==Typical effects==

Development projects, welfare, and other [[social]] spending are common programs of spending for cuts. Taxes, port and airport fees and train and bus fares are common sources of increased user fees.

Development projects, welfare, and other [[social]] spending are common programs of spending for cuts. Taxes, port and airport fees and train and bus fares are common sources of increased user fees.

In many cases, austerity measures have been [[associated]] with short-term declines in [[standard of living]] until economic conditions improved and fiscal [[balance]] was achieved.[http://en.wikipedia.org/wiki/Austerity]

In many cases, austerity measures have been [[associated]] with short-term declines in [[standard of living]] until economic conditions improved and fiscal [[balance]] was achieved.[https://en.wikipedia.org/wiki/Austerity]

[[Category: Economics]]

[[Category: Economics]]