Austerity

Outline

Austerity (2019) examines what happens when governments cut spending or raise taxes to reduce public debt. Using data from many countries over several decades, Alberto Alesina, Carlo Favero and Francesco Giavazzi show that spending cuts tend to cause milder slowdowns than tax increases, and that the design and timing of austerity matter a great deal. The book offers an evidence-based contribution to a heated policy debate.

• Austerity means a government cutting spending or raising taxes in order to reduce its public debt.
• The authors study data from many countries over several decades rather than relying on theory alone.
• Spending cuts tend to cause milder economic slowdowns than tax increases.
• How austerity is designed and when it is carried out matters a great deal for its results.
• The book offers evidence to a heated policy debate and challenges conventional economic thinking.

Alberto Alesina, Carlo Favero and Francesco Giavazzi are leading Italian economists who have studied fiscal policy for decades. Alesina (1957–2020) was a professor of economics at Harvard University and an influential researcher on politics and economics. Favero and Giavazzi are professors at Bocconi University in Milan and experts on macroeconomics and public finance.