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Austerity in 2009–2013

February 5, 2015 in Economics

The deficit reduction policies followed by several OECD countries in 2009–13, often referred to as fiscal austerity, were motivated by the bond market’s reaction to the large debts and deficits that followed the Greek crisis. New research from Alberto Alesina, Omar Barbiero, Carlo Favero, Francesco Giavazzi, and Matteo Paradisi examines the effects of austerity on output growth, and finds that fiscal adjustments based on spending cuts are less costly, in terms of output losses, than those based upon tax increases.

  • Austerity in 2009–2013,” by Alberto Alesina, Omar Barbiero, Carlo Favero, Francesco Giavazzi, and Matteo Paradisi

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Source: CATO HEADLINES

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