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NBER WORKING PAPER SERIES 1900-2003
NBER WORKING PAPER SERIES 1900-2003

... capita social spending in 1990 dollars in Table 3 show that the leader Denmark was spending only $182 per capita while the United States trailed the pack at $35 per capita. Lindert (1994) confines his measures to social spending by governments, and thus government mandates for private social spendin ...
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... However, similar to the Fed’s invitation for the fiscal authority to act responsibly relatively to orthodoxy and borrow and invest, the Fed’s advocacy on principal reduction has yet to be heard by the fiscal authority. As New York Fed President Dudley remarked in a recent interview, “the power of mo ...
The Significance of Federal Taxes as Automatic
The Significance of Federal Taxes as Automatic

... various marginal tax rates. Some of these fluctuations in the distribution of income may be associated with business cycle fluctuations; some of the change in distribution in recent decades will reflect a secular trend. The second series in Figure 1 repeats the exercise of the first series, but hold ...
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The Measurement of Income, Prices and Unemployment

... Y ≡ E  Y = C + I + G + NX • Now, use the fact that household income must equal (2) household outlays (and recall that T = R - F): Y+F=C+S+R Y=C+S+T • Equating (1) and (2) yields the “Magic Equation” C + S + T = C + I + G + NX  S + T = I + G + NX Copyright © 2009 Pearson Addison-Wesley. All rights ...
The Effects of Fiscal Policy on Economic Growth: Empirical
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... explanatory variables in growth equation. An interaction term of fiscal deficit with dummy of democracy is also included in the growth equation. ARDL technique provides best results in the presence of endogeneity. 56The explanatory variables and their lags are used as instruments. It is clear from T ...
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Boon or Boondoggle?
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a “how-to” guide: finding and interpreting gdp statistics
a “how-to” guide: finding and interpreting gdp statistics

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Macroeconomic Management When Policy Space is Constrained

... countries. Demand-management policies can support implementation of structural reforms that increase potential growth and prevent any initial drop in output and employment. When monetary policy is constrained, fiscal policy provides support. Similarly, monetary policy accommodation prevents a crowdi ...
ECO 212 – Macroeconomics Yellow Pages
ECO 212 – Macroeconomics Yellow Pages

Financialization - Hans-Böckler
Financialization - Hans-Böckler

... of increased financial fragility. Internationally, fragility was evident in the run of financial crises that afflicted the global economy in the late 1990s and early 2000s, and it has surfaced again in the recent US sub-prime mortgage crisis that spread to Europe. Furthermore, there are serious rese ...
Chapter 23
Chapter 23

... a larger effect on aggregate demand, since households may not spend all of a tax cut. Advocates of fighting recessions with tax cuts argue that hastily implemented spending increases may be wasteful, and that tax cuts have beneficial incentive effects on both demand and ...
Costly capital reallocation and the effects of government spending
Costly capital reallocation and the effects of government spending

... consumption. Thus, this type of model can explain the positive correlation between government spending and the Solow residual found by Hall (1988) and Evans (1992). Despite the multitude of theoretical studies of government spending, the empirical effects of government spending have received far les ...
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Fiscal multiplier

In economics, the fiscal multiplier (not to be confused with monetary multiplier) is the ratio of a change in national income to the change in government spending that causes it. More generally, the exogenous spending multiplier is the ratio of a change in national income to any autonomous change in spending (private investment spending, consumer spending, government spending, or spending by foreigners on the country's exports) that causes it. When this multiplier exceeds one, the enhanced effect on national income is called the multiplier effect. The mechanism that can give rise to a multiplier effect is that an initial incremental amount of spending can lead to increased consumption spending, increasing income further and hence further increasing consumption, etc., resulting in an overall increase in national income greater than the initial incremental amount of spending. In other words, an initial change in aggregate demand may cause a change in aggregate output (and hence the aggregate income that it generates) that is a multiple of the initial change.The existence of a multiplier effect was initially proposed by Keynes student Richard Kahn in 1930 and published in 1931. Some other schools of economic thought reject or downplay the importance of multiplier effects, particularly in terms of the long run. The multiplier effect has been used as an argument for the efficacy of government spending or taxation relief to stimulate aggregate demand.In certain cases multiplier values less than one have been empirically measured (an example is sports stadiums), suggesting that certain types of government spending crowd out private investment or consumer spending that would have otherwise taken place. This crowding out can occur because the initial increase in spending may cause an increase in interest rates or in the price level. In 2009, The Economist magazine noted ""economists are in fact deeply divided about how well, or indeed whether, such stimulus works"", partly because of a lack of empirical data from non-military based stimulus. New evidence came from the American Recovery and Reinvestment Act of 2009, whose benefits were projected based on fiscal multipliers and which was in fact followed - from 2010 to 2012 - by a slowing of job loss and private sector job growth.
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