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A new book by Harvard economist Alberto Alesina, and Carlo Favero and Francesco Giavazzi, both of the University Bocconi, Austerity: When It Works and When It Doesn't empirically assesses the fiscal measures implemented by 16 developed economies since the 1970s, finding that austerity plans based on tax increases result in worse economic performance than austerity plans based on cutting government spending. Their evidence essentially supports the Austrian approach to recovery after a boom-bust cycle.

Review of Alesina, Favero, and Giavazzi, Austerity: When It Works and When It Doesn't