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By Martin Wolf
Published: June 8 2010 22:07 | Last updated: June 8 2010 22:07
A consensus is forming that policymakers should tighten fiscal policy, sharply, in countries with large fiscal deficits. Yet what makes these policymakers sure that business and consumers will spend in response to austerity? What if they find that it tips economies into recession, or even deflation?
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