Alesina, Favero and Giavazzi Acknowledged for Cuts in Government Spending

Alberto Alesina, Carlo Favero and Francesco Giavazzi have been awarded the 2015 Addington Prize for Measurement presented by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank. Alesina is the Nathaniel Ropes Professor of Political Economy at Harvard University, has been Tommaso Padoa-Schioppa Visiting Professor at Bocconi University twice and is affiliated with IGIER Bocconi; Favero is a Finance Professor and Giavazzi an Economics Professor at Bocconi.

The trio received the award for their paper, The Output Effect of Fiscal Consolidation Plans, which answers the question: Do sharp reductions of government deficits (labeled fiscal adjustments or fiscal consolidations) cause large output losses? They conclude that reducing government spending to address deficits is less damaging to an economy than increasing taxes.

"The work by Alesina, Favero and Giavazzi on this critical issue is compelling and timely as we see more and more governments at all levels around the globe increasing spending and financing much of these increases with deficits", said Jason Clemens, executive vice-president of the Fraser Institute.

The Addington Prize in Measurement is named after Raymond Addington, former chairman of the Fraser Institute Board of Trustees. The award recognizes a researcher (or team) who has developed a new, interesting and important concept in public policy, exemplifying the Institute's motto: If it matters, measure it.

The winning paper was selected by a panel of academics chaired by Fraser Institute senior fellows Stephen Easton, professor of economics at Simon Fraser University, and John Chant, professor of economics (emeritus) at Simon Fraser University. Entries were judged on several criteria, including originality and significance of the ideas presented, persuasiveness of the argument, and integrity of the data.