In this paper, we study the effects of interregional spillovers from the government spending component of the American Recovery and Reinvestment Act of 2009 (the Recovery Act).
We assess the consequences of substantially increasing the marginal tax rate on U.S. top earners using a human capital model.
Inflation, unemployment, recession, economic growth—these economic concepts affect people in very real ways. In two thought-provoking, interactive lessons, learn about fiscal policy, the avenue by which Congress and the president attempt to influence the economy. Graphs compliments of FRED.
More about the Fiscal Policy online course.
Diamond-Saex proposes households in top 1 percent pay a marginal tax rate. This has spurred some debates amongst various circles that could become a reality.
There exist sticky price models in which the output response to a government spending change can be large if the central bank is nonresponsive to inflation.
Most empirical studies based on U.S. data suggest that the fiscal multiplier is less than 1 (e.g., Barro and Redlick, 2011). However, Keynes argued that the multiplier would be the largest when markets have failed to the greatest extent in coordinating economic activities (such as during the Great Depression with rampant unemployment and low capacity utilization).