We use a simple model to show why previous empirical studies of budget policy effects are flawed. Due to an identification problem, those studies' findings can be shown to be consistent with policies either mattering or not. We argue that this problem is difficult and not likely to be resolved soon.
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Article provided by Federal Reserve Bank of Minneapolis in its journal Quarterly Review.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Bernheim, B Douglas & Bagwell, Kyle, 1988.
"Is Everything Neutral?,"
Journal of Political Economy,
University of Chicago Press, vol. 96(2), pages 308-38, April.
[Downloadable!] (restricted)
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B. Douglas Bernheim & Kyle Bagwell, 1989.
"Is Everything Neutral?,"
NBER Working Papers
2086, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Martin S. Feldstein, 1986.
"The Budget Deficit And The Dollar,"
NBER Chapters,
in: NBER Macroeconomics Annual 1986, Volume 1, pages 355-409
National Bureau of Economic Research, Inc.
[Downloadable!]
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