The output effect of fiscal consolidation plans Alesina, Alberto; Favero, Carlo; Giavazzi, Francesco
Journal of international economics,
07/2015, Letnik:
96, Številka:
Supp.1
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We show that the correct experiment to evaluate the effects of a fiscal adjustment is the simulation of a multi-year fiscal plan rather than of individual fiscal shocks. Simulation of fiscal plans ...adopted by 16 OECD countries over a 30-year period supports the hypothesis that the effects of consolidations depend on their design. Fiscal adjustments based upon spending cuts are much less costly, in terms of output losses, than tax-based ones and have especially low output costs when they consist of permanent rather than stop-and-go changes in taxes and spending. The difference between tax-based and spending-based adjustments appears not to be explained by accompanying policies, including monetary policy. It is mainly due to the different responses of business confidence and private investment.
Austerity Alesina, Alberto
2019, 20190219, 2019-02-19
eBook
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,Austerityassesses 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,Austeritycharts a sensible approach based on data analysis rather than ideology.
This paper argues in favor of empirical models built by including in fiscal VAR models structural shocks identified via the narrative method. We first show that "narrative" shocks are orthogonal to ...the relevant information set a fiscal VAR. We then derive impulse responses to these shocks. The use of narrative shocks does not require the inversion of the moving-average representation of a VAR for the identification of the relevant shocks. Therefore, within this framework, fiscal multipliers can be identified and estimated even when, in the presence of "fiscal foresight," the MA representation of the VARs is not invertible.
Il rapporto fra tasso di interesse reale e tasso di crescita dell’economia è diventato centrale nel dibattito su due temi macroeconomici di grande attualità: diseguaglianza e politica fiscale. ...Confrontiamo le posizioni dei due economisti francesi protagonisti del dibattito, Thomas Piketty e Olivier Blanchard, che partono entrambi dal confronto fra tasso di interesse reale e tasso di crescita dell’economia, per analizzare, rispettivamente, l’andamento della disuguaglianza e la sostenibilità del rapporto debito/PIL nel tempo. Mostriamo che i due punti di vista, apparentemente inconciliabili, in realtà sono complementari.
Effects of Austerity Alesina, Alberto; Favero, Carlo; Giavazzi, Francesco
The Journal of economic perspectives,
04/2019, Letnik:
33, Številka:
2
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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.
The present paper is an attempt to define the contours of the right macroeconomic strategy for China. In a nutshell, we believe that the package includes a decrease in saving, with a focus on private ...saving, an increase in the supply of services, in particular health services, and an appreciation of the RMB. This is why we refer to this strategy as a ＂three-handed approach ＂： action on the fiscal and budgetary front, accompanied by currency revaluation. We start by asking how the Chinese economy got to where it is, what the strategy has been since the beginning of the reforms, and what the main characteristics of the economy are today. We then ask what is the desirable path for the future, and which are the main policy trade-offs implied by such a path. Finally, we put the various pieces together to describe what we believe is a consistent policy package.
POLICY UNCERTAINTY AND HOUSEHOLD SAVINGS Giavazzi, Francesco; McMahon, Michael
The review of economics and statistics,
05/2012, Letnik:
94, Številka:
2
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Using German microdata and a quasi-natural experiment, we provide evidence on how households respond to an increase in uncertainty. We find that household saving increases significantly following the ...increase in political uncertainty observed in the run-up to the 1998 German general election. We also find evidence of a labor supply response by workers who can use the margin offered by part-time employment. Our results are suggestive of the economic effects of "wars of attrition": when political disagreement leads to delays in adopting a reform or the possibility that earlier reforms may be revoked, the increased uncertainty could slow the economy.
The recent recession has brought fiscal policy back to the forefront, with economists and policy makers struggling to reach a consensus on highly political issues like tax rates and government ...spending. At the heart of the debate are fiscal multipliers, whose size and sensitivity determine the power of such policies to influence economic growth. Fiscal Policy after the Financial Crisis focuses on the effects of fiscal stimuli and increased government spending, with contributions that consider the measurement of the multiplier effect and its size. In the face of uncertainty over the sustainability of recent economic policies, further contributions to this volume discuss the merits of alternate means of debt reduction through decreased government spending or increased taxes. A final section examines how the short-term political forces driving fiscal policy might be balanced with aspects of the long-term planning governing monetary policy. A direct intervention in timely debates, Fiscal Policy after the Financial Crisis offers invaluable insights about various responses to the recent financial crisis.
This paper documents the speed of evolution (or lack thereof) of a range of values and beliefs of different generations of US immigrants, and interprets the evidence in the light of a model of ...socialization and identity choice. Convergence to the norm differs greatly across cultural attitudes. Moreover, results obtained studying higher generation immigrants differ from those found when the analysis is limited to the second generation and imply a lower degree of persistence than previously thought. Persistence is also country specific, in the sense that the country of origin of one’s ancestors matters for the pattern of generational convergence.
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