Rethinking Fiscal Policy
The use of fiscal policy as a stabilization device has all but vanished, more or less explicitly in Europe and de facto in the United States. The practical consequences have not been entirely satisfactory, in either place. So it is important and timely that the Oxford Review is devoting a special issue to the macroeconomics of fiscal policy. In this paper I want to discuss two underlying questions about the eclipse of fiscal policy. Why did this happen and was it a good idea? And if it was not a good idea, then what follows? Copyright 2005, Oxford University Press.
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