Years after the Great Recession, a glut of debt afflicts the world’s advanced economies. As central banks begin to close the door on accommodative monetary policies, interest rates will rise and the debt burden will increase. World leaders will have to figure out how to service rising interest payments while enabling economic growth. Economists Alberto Alesina, Carlo A. Favero and Francesco Giavazzi make cogent arguments for spending reductions rather than tax hikes to boost economic activity. getAbstract suggests this clear and compelling read to economists and analysts.
In this summary, you will learn
- How the developed economies have incurred large debt burdens,
- What remedies exist to address elevated debt levels and
- Why spending reductions tend to be less harmful to growth than tax increases.
About the Authors
Alberto Alesina is a professor at Harvard University. Carlo A. Favero and Francesco Giavazzi are professors at Bocconi University in Milan.