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And the case for the effectiveness of fiscal policy, for good or evil, has never been stronger.
This one discusses both what might be done politically and the evidence on the effectiveness of fiscal policy, which is, as Christy Romer has been arguing, now overwhelming.
More fundamentally, the President has remained in thrall to a neo-liberal philosophy that has persistently downplayed the effectiveness of fiscal policy and over-hyped monetary policy.
Similar(57)
Indeed, as also reported by others, the presentation of evidence suggesting the effectiveness of fiscal policies to reduce unhealthy behaviours only stimulated discussion about its potential for contradictory interpretation and the selective sourcing of evidence by government to suit its purpose.
The literature has addressed employment effects of fiscal policy from different dimensions.
Second, the effects of fiscal policy can be tested in an unprecedented manner.
Thus, we can test for the effects of fiscal policy by constructing a proper counterfactual allowing us identification.
Attempts to shorten the effect lag of fiscal policy have produced new policy tools.
In normal times, the effects and determinants of fiscal policy are difficult to ascertain due to their endogenous nature.
Many papers have investigated the effectiveness of stabilization policies in the recent recession, but little is known on the relationship between the two components of fiscal policy.
A sensible fiscal regime would allow scope for additional, discretionary loosening of fiscal policy.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com