Austerity - by Alberto Alesina & Carlo Favero & Francesco Giavazzi (Hardcover)

About the Book

"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."--Jacket flap.

Book Synopsis

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.

Review Quotes

"Austerity is a towering scholarly achievement, embodying decades of research and destined to serve as a touchstone for future studies--both by those who will build on it and by those who will try to tear it down."---Ken Rogoff, Project Syndicate On Point

"A towering scholarly achievement."---Kenneth Rogoff, Project Syndicate

"A Project Syndicate Best Read in 2019"

"An ambitious book. . . . if you're looking for a comprehensive discussion of austerity policies, this is the book for you."---James Smith, Society of Professional Economists

"An important work for economists, policymakers, politicians, and engaged citizens. . . . One of the clearest and best researched treatments of fiscal policy available. And though not quite suitable for the beach, it's remarkably readable. . . . It should be required reading."---Milton Ezrati, City Journal

"Every chapter in this book is thorough, informative, and persuasive. . . . Without doubt, this is an important book."---Geoffrey Wood, Central Banking Journal

"It's an impressive study of nearly 200 episodes of fiscal consolidation in the rich world to understand what's the best way to go about it. The answer--cutting spending is better than raising taxes--isn't entirely new, but the supporting evidence is compelling and it will take an equally deep study to make the opposite case."---Ferdinando Giugliano, Bloomberg Opinion

"One of the Financial Times' Summer Books of 2019: Economics"

"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

"This is an extremely important book."---Martin Wolf, Financial Times, Summer Books of 2019

"Winner of the Hayek Book Prize, Manhattan Institute"

About the Author

Alberto Alesina (1957-2020) was 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.