Category Archives: Fiscal Policy and Reforms

So far the fiscal cliff debate has mainly been about whether tax revenues should be on or off the table with little mention of spending. But the economics of the debate—as distinct from the raw politics—make no sense without considering … Continue reading →

Many have been asking me to write more about the fiscal cliff.  As we watch the election returns today, I would keep two straightforward things in mind. First, the fiscal cliff was not created by aliens from outerspace.  It is another poor … Continue reading →

“For the past 75 years or so, tax reform has been defined by a tradeoff: broaden the tax base and lower rates,” as tax historian Joseph Thorndike explained in a recent article. That’s the framework behind the Romney tax reform … Continue reading →

Three and half years ago, in February 2009, John Cogan, Volker Wieland, Tobias Cwik and I estimated what the impact of the 2009 stimulus package (ARRA) would be. Our estimates, obtained by simulating modern macroeconomic models, were much smaller than those … Continue reading →

In a recently released report the Congressional Budget Office calculated how debt reduction with the House Budget Resolution (which just passed the House today), would affect GNP in the United States. The CBO took the spending and tax parameters from the … Continue reading →

In yesterday’s Wall Street Journal, Austan Goolsbee argues that Washington Isn’t Spending Too Much.  “It’s completely normal,” he says “that spending rises during big downturns….As the economy grows back to health, the government share of the economy will fall,” making it … Continue reading →

Why has the recovery been so slow? What can we do about it? Alan Greenspan, George Shultz, Ed Prescott, Steve Davis, Nick Bloom, John Cochrane, Bob Hall, Lee Ohanian, John Cogan and I recently met at the Hoover Institution at … Continue reading →

Christina Romer gave a speech at Hamilton College earlier this month which criticizes my findings that recent temporary tax rebates had little or no effect on aggregate consumption. Romer claims that in analyzing this “relationship between two variables” I did … Continue reading →

My oped today with John Cogan in the Wall Street Journal shows that temporary fiscal stimulus packages are not good politics.  Historical evidence reveals that politicians who enact them tend not to get re-elected.  Our previous Wall Street Journal articles here and … Continue reading →

Tonight’s NewsHour debate between me and Robert Reich was about the role of Keynesian fiscal policy in the context of the today’s budget agreement. Reich was not supportive of the agreement because it precluded another stimulus package which, in his … Continue reading →