A revealing 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. Bringing needed clarity to one of today's most challenging economic issues, three leading policy experts cut through the political noise to demonstrate that there is not one type of austerity but many. Austerity assesses the relative effectiveness of tax increases and spending cuts at reducing debt, shows that austerity is not necessarily the kiss of death for political careers as is often believed, and charts a sensible approach based on data analysis rather than ideology.

En este provocador libro, los economistas Alberto Alesina y Francesco Giavazzi señalan que, si Europa no toma pronto medidas, es casi inevitable que se intensifique su declive económico y político. Si no se emprende una reforma global, las sobreprotegidas y superreguladas economías de Europa occidental continental continuarán perdiendo velocidad y su influencia política acabará siendo casi inapreciable. Eso no significa que Alemania, Francia, España y otros países que hoy son prósperos vayan a empobrecerse; su nivel de vida continuará siendo holgado. Pero acabarán siendo casi irrelevantes en el panorama mundial. En El futuro de Europa, Alesina y Giavazzi (que son europeos) esbozan las medidas que debe tomar Europa para impedir su eclipse económico y político.Según los autores, Europa tiene mucho que aprender de Estados Unidos. Los europeos trabajan menos y tienen más vacaciones que los estadounidenses; valoran sobre todo la seguridad y la estabilidad del empleo. Alesina y Giavazzi sostienen que los estadounidenses trabajan más y un número mayor de horas y están más dispuestos a soportar los altibajos de una economía de mercado. Los europeos valoran su Estado de bienestar; los estadounidenses aborrecen el gasto público. Estados Unidos es un crisol de culturas; los países europeos tienen dificultades para absorber la población inmigrante. Alesina y Giavazzi advierten de que para que Europa ponga freno a su declive, tiene que adoptar un modelo parecido al de libre mercado de Estados Unidos.Las recomendaciones de Alesina y Giavazzi sobre la forma en que Europa debe afrontar las cuestiones relacionadas con la productividad de los trabajadores, la regulación del mercado de trabajo, la globalización, la financiación de la enseñanza superior y de la investigación tecnológica, la política fiscal y sus sociedades multiétnicas suscitarán sin duda controversias, al igual que su visión de la Unión Europea y del euro. Pero su llamada de atención sonará alta y clara para todo aquel al que le preocupe el futuro de Europa.

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, 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.

Currency Unions reviews the traditional case for flexible exchange rates and "countercyclical"--that is, expansionary during recessions and contractionary in booms--monetary policy, and shows how flexible exchange rate regimes can better insulate the economy from such real disturbances as terms-of-trade shocks. The book also looks at the pitfalls of flexible exchange rates--and why fixed rates, particularly full dollarization--might be a more sensible choice for some emerging-market countries. The contributors also detail the factors that determine the optimal sizes of currency unions, explain how currency union greatly expands the volume of international trade among its members, and examine the recent implementation of dollarization in Ecuador.

The recent recession has brought fiscal policy back to the forefront, with economists and policy makers struggling to reach a consensus on 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. Further contributions 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.

As events highlight deep divisions in attitudes between America and Europe, this is a very timely study of different approaches to the problems of domestic inequality and poverty. Based on careful and systematic analysis of national data, the authors describe just how much the two continents differ in their level of State engagement in the redistribution of income. Discussing various possible economic explanations for the difference, they cover different levels of pre-tax income, openness, and social mobility; they survey politico-historical differences such as the varying physical size of nations, their electoral and legal systems, and the character of their political parties, as well as their experiences of war; and they examine sociological explanations, which include different attitudes to the poor and notions of social responsibility. Most importantly, they address attitudes to race, calculating that attitudes to race explain half the observed difference in levels of public redistribution of income. This important and provocative analysis will captivate academic and serious lay readers in economics and welfare systems.

This book explores how the political process in the United States influences the economy and how economic conditions influence electoral results. It explains how the interaction between the President and Congress lead to the formulation of macroeconomic policy and how the American voters achieve moderation by balancing the two institutions. Fluctuations in economic growth are shown to depend on the results of elections and, conversely, electoral results to depend on the state of the economy. The final chapter of the book establishes striking similarities between the American political economy and other industrial democracies.