Found 48 article(s) for author 'Alberto Alesina'

Effects of Austerity: Expenditure- and Tax-based Approaches

Effects of Austerity: Expenditure- and Tax-based Approaches. Alberto Alesina, Spring 2019, Paper, “Sometimes governments need to reduce their budget deficits aggressively. These policies are labeled “austerity.” Almost always austerity is needed because excessive debt has been accumulated, as a result of policy mistakes and political distortions (Alesina and Passalacqua 2016; Yared, in this issue). The austerity policies embraced by several European countries starting in 2010 have generated an extraordinarily harsh policy debate. One side has argued that austerity is (almost) always a bad idea. From this perspective, even European countries that were experiencing serious difficulties in financial markets—either by being totally cut off from borrowing like Greece, or by paying high risk premia like Portugal, Spain, Ireland, and Italy—should have continued to stimulate their economies with high levels of government spending. Austerity, the argument continues, was self-defeating because the recessions it induced, or extended, only increased government debt as a ratio of GDP. Blanchard and Leigh (2014) argued that this round of austerity was particularly costly: in other words, fiscal multipliers were especially high. The other side argued that postponing austerity would have caused Effects.Link

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Immigration and Preferences for Redistribution in Europe

Immigration and Preferences for Redistribution in Europe. Alberto Alesina, February 2019, Paper, “We examine the relationship between immigration and attitudes toward redistribution using a newly assembled data set of immigrant stocks for 140 regions of 16 Western European countries. Exploiting within-country variations in the share of immigrants at the regional level, we find that native respondents display lower support for redistribution when the share of immigrants in their residence region is higher. This negative association is driven by regions of countries with relatively large Welfare States and by respondents at the center or at the right of the political spectrum. The effects are also stronger when immigrants originate from Middle-Eastern countries, are less skilled than natives, and experience more residential segregation. These results are unlikely to be driven by immigrants’ endogenous location choices.Link

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Misperceptions about immigration and support for redistribution

Misperceptions about immigration and support for redistribution. Alberto Alesina, July 31, 2018, Paper, “The debate on immigration is often based on misperceptions about the number and character of immigrants. The column uses data from surveys in six countries to show that such misperceptions are striking and widespread. The column also describes how an experiment in which people were encouraged think about their perception of immigrants made them more averse to redistribution in general, suggesting that the focus on immigration in the political debate – without correcting the misperceptions respondents have about immigrants – could have the unintended consequence of reducing support for redistribution.Link

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Alberto Alesina on Inequality, Immigration, and Austerity

Alberto Alesina on Inequality, Immigration, and Austerity July 2018. GrowthPolicy’s Devjani Roy interviewed Alberto Alesina, the Nathaniel Ropes Professor of Political Economy at Harvard University, on inequality, immigration, and austerity. | Click here for more interviews like this one. Links: Alberto Alesina’s faculty page at Harvard | Publications | NBER research page | Wikipedia Growthpolicy.org. […]

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Immigration and Redistribution

Immigration and Redistribution. Alberto Alesina, June 2018, Paper, “We design and conduct large-scale surveys and experiments in six countries to investigate how natives’ perceptions of immigrants influence their preferences for redistribution. We find strikingly large biases in natives’ perceptions of the number and characteristics of immigrants: in all countries, respondents greatly overestimate the total number of immigrants, think immigrants are culturally and religiously more distant from them, and are economically weaker – less educated, more unemployed, poorer, and more reliant on government transfers – than is the case.Link

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Climbing out of Debt

Climbing out of Debt. Alberto Alesina, March 2018, Paper, “Almost a decade after the onset of the global financial crisis, national debt in advanced economies remains near its highest level since World War II, averaging 104 percent of GDP. In Japan, the ratio is 240 percent and in Greece almost 185 percent. In Italy and Portugal, debt exceeds 120 percent of GDP.” Link

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Is it the ”How” or the ”When” that Matters in Fiscal Adjustments?

Is it the ”How” or the ”When” that Matters in Fiscal Adjustments? Alberto Alesina, March 2018, Paper, “Using data from 16 OECD countries from 1981 to 2014 we study the effects on output of fiscal adjustments as a function of the composition of the adjustment–that is, whether the adjustment is mostly based on spending cuts or on tax hikes–and of the state of the business cycle when the adjustment is implemented. We find that both the ”how” and the ”when” matter, but the heterogeneity related to the composition is more robust across different specifications. Adjustments based upon permanent spending cuts are consistently much less costly than those based upon permanent tax increases. Our results are generally not explained by different reactions of monetary policy. However, when the domestic central bank can set interest rates–that is outside of a currency union–it appears to be able to dampen the recessionary effects of consolidations implemented during a recession.Link

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What do we know about the effects of Austerity?

What do we know about the effects of Austerity? Alberto Alesina, January 2018, Paper, “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. On average fiscal adjustment based upon spending cuts have very small output costs and in some cases they are expansionary. We then discuss which possible models can explain these findings and discuss how the evidence can disentangle them.Link

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The Effects of Fiscal Consolidations: Theory and Evidence

The Effects of Fiscal Consolidations: Theory and Evidence. Alberto Alesina, May 2017, Paper, “We investigate the macroeconomic effects of fiscal consolidations based upon government spending cuts, transfers cuts and tax hikes. We extend a narrative dataset of fiscal consolidations, finding details on over 3500 measures. Government spending and transfer cuts reduce output by less than tax hikes. Standard New Keynesian models match our results when fiscal shocks are persistent. Wealth effects on aggregate demand mitigates the impact of a persistent spending cut. Static distortions caused by persistent tax hikes cause larger shifts in aggregate supply under sticky prices. This channel explains different sizes of multipliers found in fiscal stimuli compared to consolidation plans.Link

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Is it the “How” or the “When” that Matters in Fiscal Adjustments?

Is it the “How” or the “When” that Matters in Fiscal Adjustments? Alberto Alesina, October 2016, Paper, “Using data from 16 OECD countries from 1981 to 2014, we find that the composition of fiscal adjustments is much more important than the state of the cycle in determining their effects on output. Fiscal adjustments based upon spending cuts are much less costly than those based upon tax increases, regardless of whether the adjustment starts in a recession or not.Link

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