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Fiscal Policy Today

The Life-Cycle Hypothesis

The essential message of the life-cycle hypothesis was captured long ago in one of Aesop's fables:

Permanent-Income Hypothesis

Not everyone spends the way that economists assume they do. Here is what happens when they ignore economic theory and just spend:

Measuring Fiscal Policy

Here is a long discussion of the government debt. The part that you should focus on is the part on structural and cyclical deficit: has everything you want to know about automatic stabilizers:

Is Fiscal Policy Dead?

Greg Mankiw links to 22 articles by economists and others arguing that the stimulus package of 2008 was a bad idea:

A Dam Analogy

A short article by Stephen Cecchetti in the form of a pdf file that suggests that stabilization policy is best done without fiscal policy:

Lagging Doubts has a thorough look at various lags:

Crowding Out

Wikipedia has a reasonably short but complete article on crowding out:

These links were checked on July 4, 2008

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Copyright Robert Schenk

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