Specifically, if "the indirect effect ... [on] expectations of the measures taken are understood to be part of a credible ... program of consolidation, designed to permanently reduce the share of government in GDP ... [and thus] taxation in the future," then the shift in expectations will bring forth an expansion greater than the contraction caused by budget cuts. Inspired by this "German view," Giavazzi and Pagano went looking for similar cases and found two: Denmark and Ireland. While most Western European countries went through a punishing recession in the early 1980s, Denmark and Ireland, a bit later in the decade, cut spending and their economies expanded, Ireland being "the most prominent example of an expansionary cut in public spending."

Mark Blyth, Austerity, loc. 457