Category Fiscal policy
New Keynesian neo-fiscalists for increasing austerity
I was off at the cottage when Simon Wren-Lewis and Paul Krugman responded to my post on neo-fiscalism. Amusingly, given Simon's metaphor, the handbrake on the MX6 seized on as I was driving, slowing me down and creating a nasty smell. I did a fiscal bodge-job with a screwdriver to free it, and did a […]
Neofiscalist delusions?
It seems I need to respond to Paul Krugman. "The neomonetarist movement starts from an acknowledgement of reality: shortfalls of aggregate demand do happen, and they do matter, and we need an answer. Like the original monetarists, however, they reject any government role in the form of discretionary fiscal policy. Instead, they argue that the […]
Fiscal Policy Shocks
Well, here is a new contribution to the debate over the effect of fiscal policy shocks from the journal of the Institute for Fiscal Studies. The authors Paweł Borys, Piotr Ciżkowicz and Andrzej Rzońca are from the Warsaw School of Economics and look at the impact of fiscal policy shocks on EU new member states. […]
John Cochrane on Monetary Policy with Interest on Reserves
Central banks are usually owned by governments, and transfer their seigniorage profits to those governments. This creates a link between monetary and fiscal policy. But the presence of that link says nothing about the direction of causation. John Cochrane (pdf) says that central banks' paying interest on reserves allows them to conduct monetary policy independently […]
Is The Big Problem r g?
Two different memes about secular stagnation seem to be circulating in the econoblogosphere recently. The first says that r < g, or will be in future, therefore the economy is dynamically inefficient, and we need government to fix this problem. The second says that r > g, or will be in future, therefore inequality is […]
Secular stagnation and the end of retirement?
Retirement is weird, when you think about it. We consume small amounts of leisure for most of our lives, then suddenly stop working completely and consume a big bunch of leisure for the rest of our lives. We smooth our consumption of all other goods, but we don't smooth our consumption of leisure. Instead we […]
Macro savings vehicles
An individual who decides to save for retirement has a choice between a number of different savings vehicles: stocks, bonds, real estate, etc. What are the choices when we aggregate up to the economy as a whole? I write this post in response to an email from someone who is knowledgeable about the savings vehicle […]
US Budget 2015: Some Quick Thoughts
The Budget of the U.S. Government for the 2015 fiscal year was presented at the White House today and unlike Canada, we are not looking at a balanced budget by 2015. Indeed, the forecast is for a small decline in the deficit but the rest of the decade looks like deficits all the way down. […]
Taxation and Growth: A North American Cross-Border Comparison
My last comparison of U.S. states and Canadian provinces with respect to their federal transfer revenue shares got me thinking about the other revenue sources and whether any relationship could be found between economic growth and revenue composition. Income taxation is supposed to have incentive and distortion effects on saving, risk taking and labor supply […]
Fiscal Federalism: A Cross-Border Comparison
As a federal country, one of Canada’s hallmarks is a well-developed system of intergovernmental transfers. Indeed, we often remark that Canadian provinces are dependent on federal transfers for large chunks of their spending and there is some debate over whether Canada’s provinces should engage in more own-source revenue effort rather than plead for more transfers. […]
Worthwhile Canadian Initiative 
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