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Alesina, Favero and Giavazzi Win the Hayek Book Prize

, by Ezio Renda
The book awarded by the Manhattan Institute, Austerity, explores the relationship between fiscal discipline and economic growth

Two Bocconi Professors, Carlo Favero and Francesco Giavazzi, and a Bocconi alumnus now working at Harvard University, Alberto Alesina, are the winners of the Manhattan Institute's annual Hayek Book Prize for their book Austerity: When It Works and When It Doesn't, published by Princeton University Press. The group will share a $50,000 award.

"We are very honored for the prize, given how impressive were the contributions of the other finalists. The world does not need austerity now, but very soon enormous government debts will have to be dealt with. We hope this book will help to think about how to do it," Alesina, Favero, and Giavazzi commented.

Speaking of the five books that won the honor of finalist for the prize, Jury Chair Amity Shlaes said, "In a time when a health crisis has caused Americans to turn to government, these books remind us that the best way to recovery lies with markets, not government expansion. Our winner, Austerity, couldn't be timelier, providing evidence that when it comes time to implement these policies, government cutbacks beat higher taxes."

"Congratulations to Professors Alesina, Favero, and Giavazzi for their richly deserved prize. Drawing on the experience of 16 countries both before and after the 2008 financial crisis, Austerity carefully explores the relationship between fiscal discipline and economic growth and reaches conclusions that represent a powerful challenge to the conventional wisdom," added Manhattan Institute President Reihan Salam.

The Prize is named after Political philosopher and Nobel laureate Friedrich August von Hayek, author of groundbreaking works such as The Road to Serfdom and The Constitution of Liberty, a key figure in the twentieth century revival of classical liberalism and a formative influence on the Manhattan Institute.

The Manhattan Institute is an American think tank founded in 1977 as "a voice of free-market ideas", whose mission is "to develop and disseminate new ideas that foster greater economic choice and individual responsibility."

Austerity was one of five finalists which were announced in March:

Alberto Alesina is the Nathaniel Ropes Professor of Political Economy at Harvard University. He is the author, with Francesco Giavazzi, of The Future of Europe: Reform or Decline. Carlo Favero is the Deutsche Bank Chair in Quantitative Finance and Asset Pricing at Bocconi University in Italy. He is the author of Applied Macroeconometrics. Francesco Giavazzi is Professor of Economics at Bocconi University.

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