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Austerity
Glossaries
| Term | Main definition |
|---|---|
| Austerity | In economics, austerity is defined as a set of economic policies a government implements to control public sector debt.Austerity measures are the response of a government whose public debt is so large that the risk of default, or the inability to service the required payments on its debt obligations, becomes a real possibility. Default risk can spiral out of control quickly; as an individual, company or country slips further into debt, lenders will charge a higher rate of return for future loans, making it more difficult for the borrower to raise capital.
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