Research Report Activist Fiscal Policy
Alan J. Auerbach, William G. Gale, Benjamin H. Harris
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This paper reviews the recent evolution of thinking and evidence regarding the effectiveness of activist fiscal policy. Although fiscal interventions aimed at stimulating and stabilizing the economy have returned to common use, their efficacy remains controversial. This paper reviews the debate about the traditional types of fiscal policy interventions, as well as more targeted policies. It concludes that while there have certainly been some improvements in estimates of the effects of broad-based policies, much of what has been learned recently concerns how such multipliers might vary with respect to economic conditions.
Research Areas Economic mobility and inequality Taxes and budgets
Tags Fiscal policy Federal budget and economy