Austerity

Alberto Alesina; Carlo Favero; Francesco Giavazzi

Published by Princeton University Press 2019

Austerity

When It Works and When It Doesn't

Alberto Alesina, Carlo Favero and Francesco Giavazzi

https://doi.org/10.1515/9780691185019

Overview
Contents

About this book

An authoritative analysis of one of the most controversial and influential economic policies of our time.

A timely and incisive look at austerity measures that succeed—and those that don’t

Fiscal austerity is hugely controversial. Opponents argue that it can trigger downward growth spirals and become self-defeating. Supporters argue that budget deficits have to be tackled aggressively at all times and at all costs. In this masterful book, three of today’s leading policy experts cut through the political noise to demonstrate that there is not one type of austerity but many.

Looking at thousands of fiscal measures adopted by sixteen advanced economies since the late 1970s, Austerity assesses the relative effectiveness of tax increases and spending cuts at reducing debt. It shows that spending cuts have much smaller costs in terms of output losses than tax increases. Spending cuts can sometimes be associated with output gains in the case of expansionary austerity and are much more successful than tax increases at reducing the growth of debt. The authors also show that austerity is not necessarily the kiss of death for political careers as is often believed, and provide new insights into the recent cases of European austerity after the financial crisis.

Bringing needed clarity to one of today’s most challenging subjects, Austerity charts a sensible approach based on data analysis rather than ideology.

Author information

Alberto Alesina is the Nathaniel Ropes Professor of Political Economy at Harvard University. He is the author, with Francesco Giavazzi, of The Future of Europe: Reform or Decline. Carlo Favero is the Deutsche Bank Chair in Quantitative Finance and Asset Pricing at Bocconi University in Italy. He is the author of Applied Macroeconometrics. Francesco Giavazzi is professor of economics at Bocconi University.

Reviews

"This book is timely in offering an alternative view. . . . Read this book as an antidote to the calls for governments to give up on fiscal discipline."---Chris Giles, Financial Times

Topics

Frontmatter Publicly Available Download PDF	i
CONTENTS Publicly Available Download PDF	vii
ACKNOWLEDGMENTS Publicly Available Download PDF	xi
1. Introduction Requires Authentication Unlicensed Licensed Download PDF	1
2. Theory Requires Authentication Unlicensed Licensed Download PDF	17
3. Expansionary and Recessionary Austerity up to the Financial Crisis of 2008 Requires Authentication Unlicensed Licensed Download PDF	29
4. Measuring the Effects of Fiscal Policy Requires Authentication Unlicensed Licensed Download PDF	50
5. Fiscal Plans Requires Authentication Unlicensed Licensed Download PDF	64
6. The Data Requires Authentication Unlicensed Licensed Download PDF	73
7. The Effects of Austerity Requires Authentication Unlicensed Licensed Download PDF	95
8. European Austerity during the Great Recession Requires Authentication Unlicensed Licensed Download PDF	117
9. When Austerity? Requires Authentication Unlicensed Licensed Download PDF	160
10. Austerity and Elections Requires Authentication Unlicensed Licensed Download PDF	175
11. Conclusions Requires Authentication Unlicensed Licensed Download PDF	194
12. The Models in Our Book: A User’s Guide Requires Authentication Unlicensed Licensed Download PDF	203
NOTES Requires Authentication Unlicensed Licensed Download PDF	251
REFERENCES Requires Authentication Unlicensed Licensed Download PDF	259
INDEX Requires Authentication Unlicensed Licensed Download PDF	267