austerity
Difficult economic conditions created by government measures to reduce public spending and debt.
Example
“The government's austerity measures cut public services and raised taxes to reduce the deficit.”
Memory Tip
Auster-ITY — auster sounds like 'austere,' meaning strict and severe. Austerity is strict economic discipline.
Why It Matters
Austerity policies directly affect your everyday life through changes in government services, tax rates, and job availability. When governments implement austerity measures, it can mean reduced funding for schools, healthcare, and infrastructure, while potentially increasing taxes or reducing social benefits you may depend on.
Common Misconception
Many people believe austerity always helps the economy recover faster by reducing debt, but critics argue it can actually slow economic growth and increase unemployment in the short term. The effectiveness of austerity depends heavily on economic conditions and how it is implemented.
In Practice
When Greece faced a debt crisis in 2010, the government implemented severe austerity measures including cutting public sector salaries by 20 percent, raising taxes, and reducing pension benefits. This led to widespread unemployment exceeding 27 percent and economic contraction, demonstrating how austerity can create significant hardship for citizens while the country struggled to manage its massive debt burden.
Etymology
From Greek 'austeros' meaning 'harsh, severe' — harsh economic conditions.
Common Misspellings
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