The critical point to note is that while there are a few positive instances of austerity leading to expansion among the legion of failures in this period, just as there were in the 1980s and 1990s, these episodes took place just after World War I, when the states in question, Germany and the United States foremost among them, were off the gold standard. As such, they could adjust their domestic costs by letting their exchange rate slide rather than through the forced internal deflation of domestic wages and prices. They were also implementing austerity at the height of the postwar boom.

Mark Blyth, Austerity, loc. 503