Research Impact Award 2023: Alesina, Favero, and Giavazzi's Book Is the Winner

Published in 2019 by Princeton University Press, the book Austerity. When It Works and When It Doesn't, by Alberto Alesina, Carlo Favero, and Francesco Giavazzi, has been translated into Italian, Spanish, and Chinese. In 2019, the Financial Times included it among its Summer Books, and in 2020, it won the Manhattan Institute's Hayek Book Prize. The then-President of the European Central Bank, Mario Draghi, referenced the empirical evidence from the book in his speech at the 2019 Jackson Hole meeting.

Adding to its string of successes is the recent Bocconi Research Impact Award 2023, presented yesterday to Professor Favero during the University's Research Celebration evening.

Crafted by two Professors from the Bocconi Department of Economics (Favero and Giavazzi) and a prestigious alumnus, the late Alberto Alesina, the book analyzes and discusses nearly 200 episodes of public debt reduction (austerity) in 16 countries.

"There is a strong macro argument for countercyclical deficits," said Professor Favero, "but no macro argument in favor of upward trending debt to GDP ratios. Upward trending debt is a disease caused by irresponsible governments who transfer resources inter-temporally from future generations (not yet born and therefore not voting) to current voting generations. Irresponsible politicians gain rapid popularity while responsible ones are subject to unjust criticisms and become the target of trolls in the social media. Austerity is the cure for upward trending debt. The cure comes with side economic and social effects and the book is about the best way to administer the cure. 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 term of output losses than tax increases."



In memory of their late friend, Professors Favero and Giavazzi have decided to donate the €7,500 prize to the Alberto Alesina Young Economists Award project. The program awards a prize each year to the most deserving student enrolled in the MSc in Economic and Social Sciences, the current version of the course in Discipline Economiche e Sociali from which Alesina graduated in 1981. This creates a symbolic connection between generations of economists.

The Research Impact Award was established at Bocconi to stimulate the production of research relevant both to the scientific community and to society. Participation is reserved for scientific publications (articles or books) published between 3 and 7 years before the call that are distinguished by their reach and significance, i.e., the impact they have had on the world.

The award is granted by an Alumni jury within a shortlist established by the Bocconi Research Committee. This year's jury included Alessandro Bogliolo, Audemars Piguet Chair of the Board of Directors; Barbara Cominelli, CEO Italy and EMEA retail at JLL; Veronica Diquattro, President of B2C Europe at Omio; Monica Mandelli, Managing Director at KKR; e Alessandro Valenti, President EMEA at Louis Vuitton.

Pictured (by Massimiliano Stucchi) above, from left: Antonella Carù, Dean for Development and Alumni Relations; Francesco Billari, Rector; Carlo Favero; Barbara Cominelli; Elena Carletti, Dean for Research.