Fiscal Stimulus – Tax Reductions or Spending Increases?
Posted in Macroeconomics on Oct 26th, 2009
Count another in favor of prudence. We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. […]