‘Fair distribution of burdens’ vital as part of austerity process

Ireland has to date managed the austerity process better than most other countries, but the continued success of the adjustment process depends on maintaining social cohesion and a sense of fairness, according to the Central Bank’s chief economist, Lars Frisell.

There has been much discussion among academics about the multiplier effect in the event of an economic downturn, he said. This means the effect on an economy of the Government cutting spending or the impact of increasing spending.

However, just as important as the multiplier effect is the way that budgetary cutbacks are implemented.