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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (853417)	5/1/2015 2:32:59 PM
From: TimF	Read Replies (1) \| Respond to of 1576671

Our main results are that a surprise deficit-financed tax cut is the best fiscal policy to stimulate the economy a deficit[-financed government] spending shock weakly stimulates the economy. government spending shocks crowd out both residential and non-residential investment without causing interest rates to rise. sfb649.wiwi.hu-berlin.de we find that both increases in taxes and increases in government spending have a strong negative effect on private investment spending. This effect is consistent with a neoclassical model with distortionary taxes, but more difficult to reconcile with Keynesian theory: while agnostic about the sign, Keynesian theory predicts opposite effects of tax and spending increases on private investment. This does not appear to be the case. mitpressjournals.org gregmankiw.blogspot.com The bottom line is that the evidence for the Keynesian effects of fiscal policy is far from overwhelming. Keynesian results cannot be ruled out but we simply don’t understand the short-run dynamics of cycles very well. So why should we be so convinced it is time to spend $1 trillion or more? marginalrevolution.com