The result could be austerity, or fiscal contraction, to the level of 4% of GDP.

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On its definition of deficit-cutting, the fund finds that fiscal contraction tends to reduce GDP and increase unemployment.

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The myth of an expansionary fiscal contraction, the idea that deficit-cutting would boost growth, has been largely dispelled.

ECONOMIST: Charlemagne

This fiscal contraction will weigh heavily on the rich world's growth.

ECONOMIST: Leaders

In opposition, George Osborne flirted with the notion of an "expansionary fiscal contraction" - a fiscal tightening that so helps confidence, that it actually increases growth, even in the short run.

BBC: Eurozone and the UK: A tale of two crises

Recognizing the need to pursue growth-oriented policies that support demand and recovery, the United States will calibrate the pace of its fiscal consolidation by ensuring that its public finances are placed on a sustainable long-run path so that a sharp fiscal contraction in 2013 is avoided.

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The government claims that the economy will record positive growth in the fiscal year to March after two years of contraction, after growing by 0.6% in the first quarter of 2000.

BBC: Japan's consumers are still worried

The economy eked out a 0.5% expansion in the fiscal year ended in March after two years of contraction, but that is not helping.

CNN: Not so Fresh Polls

Looking to the first fiscal quarter of 2013, however, we expect continued softness in wired infrastructure and continued supply chain contraction in industrial will result in a decrease in revenue.

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