Austerity : when it works and when it doesn't / Alberto Alesina, Carlo Favero, and Francesco Giavazzi.

Format:

Book

Author/Creator:

Alesina, Alberto, author.

Favero, Carlo A., author.

Giavazzi, Francesco, author.

Language:

English

Subjects (All):

Recessions.

Fiscal policy.

Financial crises.

Government spending policy.

Physical Description:

xii, 276 pages : illustrations (some color) ; 25 cm

Place of Publication:

Princeton : Princeton University Press, [2019]

Summary:

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.

Contents:

Austerity p. 1

Four Contributions of This Book p. 8

The Punchline in a Nutshell p. 10

The Simple Keynesian Model p. 18

Confidence and Uncertainty p. 22

Austerity and the Business Cycle p. 23

Multiyear Plans p. 23

Incentives and the Supply Side p. 24

Accompanying Policies p. 26

3 Expansionary and Recessionary Austerity up to the Financial Crisis of 2008 p. 29

Expansionary Austerity p. 31

Recessionary Austerity p. 42

4 Measuring The Effects Of Fiscal Policy p. 50

The Empirical Evidence p. 51

Multipliers during Austerity: The Early Literature p. 56

The Narrative Approach p. 59

5 Fiscal Plans p. 64

Constructing Fiscal Plans p. 65

Measuring the Effects of Fiscal Plans p. 70

6 The Data p. 73

Introduction: A Broad Look at Our Data p. 73

The Data in More Detail p. 78

Other Data and Sources p. 93

7 The Effects of Austerity p. 95

Taxes versus Expenditures p. 95

The Role of Accompanying Policies p. 105

An Alter native Specification p. 112

Why Do EB and TB Plans Have Different Effects? p. 113

8 European Austerity during the Great Recession p. 117

Europe in the Aftermath of the Financial Crisis p. 118

European Austerity p. 123

Evaluating European Austerity in 2010-14 p. 141

The Greek Tragedy p. 148

Did Fiscal Multipliers Change after the Crisis? p. 157

9 When Austerity? p. 160

Fiscal Policy in Booms and Recessions p. 161

"How" and "When" p. 163

The "When" and the How" Together p. 166

Austerity at the Zero Lower Bound p. 170

10 Austerity and Elections p. 175

Existing Evidence p. 176

Fiscal Plans and Elections p. 180

A Few Examples p. 183

12 The Models in Our Book: A User's Guide p. 203

Why Simulating Models? A Simple Example p. 204

Our Empirical Models: An Overview p. 205

The Models Used in the Literature to Measure Multipliers p. 206

The Models in Chapter 7 p. 214

Fiscal Adjustments and the Dynamics of Debt over GDP p. 222

TB versus EB Austerity in a General Equilibrium Model p. 224

Reconsidering Blanch aid and Leigh (2014) in Chapter 8 p. 227

The Model of "How" and "When" in Chapter 9 p. 232

Who Adjusts and Who Wins: More Details on the Model for Chapter 10 p. 240.

Notes:

Includes bibliographical references and index.

ISBN:

9780691172217

0691172218

OCLC:

1032656468