What do we know about the effects of austerity by Alberto F. Alesina, Carlo Favero and Francesco Giavazzi published by NBER (1/2018). “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…”
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