The textbook answer is fiscal consolidation plus currency depreciation, so that net exports make up for the fall in domestic demand. But Macri either wouldn't or couldn't bite the bullet — unwilling to take the heat for large budget cuts 2/
— Paul Krugman (@paulkrugman) September 3, 2019
Expansionary austerity does exist and work then?
Fiscal consolidation is austerity. Currency depreciation is expansionary. Get the second larger than the first, the net is expansionary.
What did Osborne try? Fiscal contraction plus currency depreciation…..