Skip to Content
Academic Mode
Research Brief

Globalization's Impact on Austerity Policy

Analyzing austerity as a political and communicative instrument in a globalized world (2020).

Collaborators

Year

2020

Level

HHX

Grade

12

Status

Completed

Lowkey: This project is 'Macro-Anton'. Written in 2020 before starting university, it shows the early seeds of my interest in the tension between market discipline, politics, and macroeconomic stability.

Summary

This project analyzes how economic globalization and international interdependence have contributed to making austerity (fiscal consolidation) a central political tool during crises. Combining economic theory, historical source analysis, and empirical illustration, the project illuminates why austerity policies are both legitimized and criticized across different historical periods and economic schools of thought.

Research Questions

01

How does globalization influence political pressure for fiscal discipline?

02

Why is austerity legitimized differently in wartime versus modern debt crises?

03

What are the consequences of 'The Age of Austerity' for future economic policy?

Method & Theory

Model Framework

Comparative Analysis (Theory & History)

Identification Strategy

Contrasting Keynesian and Neoliberal perspectives on crisis management.

Data & Frequency

Historical cases (Australia 1942 vs. Modern Debt Crises) and macroeconomic indicators.

Estimation Approach

Qualitative analysis of political communication and market reactions.

[ Transmission Pathway Diagram: Model Architecture ]

Central Points

  • Disciplining Pressure: Increased capital mobility makes states sensitive to market reactions, creating incentives to signal 'credibility' through austerity.

  • Shifting Legitimacy: In wartime, austerity is legitimized as 'national survival'; today, as 'market discipline' and 'financial stability'.

  • Theoretical Split: Keynesians warn of negative multiplier effects, while Neoliberals emphasize confidence effects and lower risk premia.

  • Context Dependency: There is no 'one-size-fits-all'. The effect depends on the business cycle, debt composition, and institutions.

Bibliography

  • Blyth, M. (2013). Austerity: The History of a Dangerous Idea. Oxford University Press.
  • Keynes, J. M. (1936). The General Theory of Employment, Interest and Money.
  • Alesina, A., & Ardagna, S. (2010). Large Changes in Fiscal Policy: Taxes versus Spending.

Subjects

International Economics A
History A

Sources

Sources

Economic Theory (Keynes, Hayek, Mark Blyth), Historical Sources.

Software

Word / Excel (Descriptive Statistics).

Download Project

Download Thesis (PDF) Full Text • 2.4 MB
Reference
Jørgensen, Anton M. E. (2020). Globalization's Impact on Austerity Policy. HHX Project, Handelsgymnasiet Lolland-Falster.

Perspectives

EU Stability Pact: How do we balance discipline with the need for investment?

Sovereign Debt: Understanding debt sustainability in a world of free capital flows.

Political Communication: How economic necessities are translated into political messages.

Cite this work

@misc{globalization's_2026,
  author = {Jørgensen, Anton M. E.},
  title = {Globalization's Impact on Austerity Policy},
  year = {2026},
  url = {https://antonebsen.dk/projects/globalization's-impact-on-austerity-policy}
}
Jørgensen, Anton M. E. (2020). Globalization's Impact on Austerity Policy. HHX Project, Handelsgymnasiet Lolland-Falster.