Austerity is actually the quality of being austere, which means being severe or stern in disposition or appearance. Austerity refers to the ability of someone to be somber and grave. An austere person appears to be very severe, or strict in their appearance and behavior. For example: the austerity of the school principal.
Austerity can also refer to a strict habit, practice, or act. For example: the austere lifestyle of military personnel. It refers to the disciplined lifestyle that they lead.
In economics, austerity refers to the reduced availability of luxuries and consumer goods. This especially refers to the reduced availability which is brought about by a government policy, or due to the fault of the government. Austerity can also refer to the economy itself, especially when it is severe and rigid, such as the economy during a war, i.e. wartime austerity.
Austerity can also refer to something that is very simple or bare, or something that is done in a simple and plain way, without adornment or ornamentation. For example: an austere office or an austere style of writing. Austerity also has little chance of giving pleasure as it is either too plain or too strict. Another example would be the simple lifestyle of monks, which borders on austerity.