Self-defeating austerity entails �perverse effects� of fiscal consolidation such that fiscal indicators deteriorate. Inter alia, this depends on the size of the fiscal multiplier as Keynes (1933. The Means to Prosperity. London: Macmillan) underlined. We find that the government expenditure multiplier was less than 1 in 1930s� Britain. Austerity was not self-defeating in the long…