Details

Autor(en) / Beteiligte

• Alesina, Alberto
• Favero, Carlo
• Giavazzi, Francesco

Titel

Effects of Austerity: Expenditure- and Tax-based Approaches

Ist Teil von

• The Journal of economic perspectives, 2019-04, Vol.33 (2), p.141-162

Ort / Verlag

Nashville: American Economic Association

Erscheinungsjahr

2019

Link zum Volltext

Quelle

Business Source Ultimate

Beschreibungen/Notizen

• We review the debate surrounding the macroeconomic effects of deficit reduction policies (austerity). The discussion about "austerity" in general has distracted commentators and policymakers from a very important result, namely the enormous difference, on average, between expenditure- and tax-based austerity plans. Spending-based austerity plans are remarkably less costly than tax-based plans. The former have on average a close to zero effect on output and lead to a reduction of the debt/GDP ratio. Tax-based plans have the opposite effect and cause large and long-lasting recessions. These results also apply to the recent episodes of European austerity, which in this respect were not especially different from previous cases.