Citation

Discussion Paper Details

Please find the details for DP12655 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: What do we know about the effects of austerity?

Author(s): Alberto F Alesina, Carlo A. Favero and Francesco Giavazzi

Publication Date: January 2018

Keyword(s): austerity

Programme Area(s): International Macroeconomics and Finance

Abstract: This paper summarizes the results of a large recent literature on multi year fiscal plans for deficit reduction (austerity). The key results are that deficit reduction policies based upon spending cuts are much less costly in terms of short run output losses than tax based adjustments. On average fiscal adjustment based upon spending cuts have very small output costs and in some cases they are expansionary. We then discuss which possible models can explain these findings and discuss how the evidence can disentangle them.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12655

Bibliographic Reference

Alesina, A, Favero, C and Giavazzi, F. 2018. 'What do we know about the effects of austerity?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12655