Potential Output Pessimism and Austerity in the European Union
构建了一个包含政策制定者学习潜在产出的商业周期模型，分析全球金融危机后欧盟的衰退，发现对潜在产出的过度悲观引发财政紧缩，而紧缩又加剧衰退，形成恶性循环，导致经济长期低迷。
Abstract The paper develops a business cycle model with policymakers' learning about potential output to analyze the European recession following the Global Financial Crisis. The initial recession led to overpessimism about potential output and cyclically adjusted budget balance (CAB), triggering fiscal austerity. The austerity caused further recession, which reinforced potential output and CAB pessimism, requiring continued austerity. The mutual reinforcement between pessimism and austerity contributed to the prolonged recession. The model replicates new findings regarding revisions to potential output estimates and the relationship between fiscal consolidation and policymakers' beliefs. Without policymakers' overpessimism, Eurozone GDP would have been 4.5% higher in 2012.