In a co-authored op-ed, PhD student Gualtiero Azzalini shares insights from his joint research on government methods for reducing deficits
— December 12, 2016
Excerpt from VoxEU -- "Fiscal adjustments based upon spending cuts are much less costly in terms of short-run output losses than those based upon tax increases. Adjustments based on tax increases are associated with large and prolonged recessions, whether the adjustment starts in a recession or not. The dynamic response of the economy to a consolidation programme does depend on whether it is adopted in a period of economic expansion, but the size of this source of non-linearity is small relative to the effect that depends on whether the consolidation is tax-based or expenditure-based."