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Austerity - Definition and Overview |
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Austerity is a term from economics that describes a policy where nations reduce living standards, curtail development projects, and generally shift the revenue stream out of the physical economy, in order to satisfy the demands of creditors. Typically, private banks, or institutions like the International Monetary Fund (I.M.F.), will demand an "austerity policy" from a national government, as a condition for re-financing loans that are coming due. This might involve cutting food or fuel subsidies, underfunding public infrastructure (transport, education, health care, water and power management), or rationing. When these demands are made by the I.M.F., they are known as I.M.F. conditionalities.
Examples of Austerity
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