"Discretionary fiscal policy is dominated by monetary policy
as a stabilization tool because of
lags in the application
and removal of discretionary fiscal stimulus."
"Even if policymakers get the timing right,
discretionary fiscal stimulus would be
somewhere between completely ineffective (the Ricardian view)
somewhat ineffective with bad side effects
(higher interest rates and crowding-out of private investment)."
fiscal stabilization needs to be undertaken with trepidation, if at all,
because the biggest fiscal policy priority should be
the long-run fiscal balance."
- " Policymakers foolish enough to ignore (1) through (3) should at least make sure that any fiscal stimulus is very short-run, including pulling demand forward, to support the economy before monetary policy stimulus fully kicks in while minimizing harmful side effects and long-run fiscal harm. "
Friday, October 7, 2016
The pre fall 08 macronautic guide book
Posted by Owen Paine at 6:21 AM