Attacking the Treasury View, Again

Dean Baker

CEPR Reports and Issue Briefs from Center for Economic and Policy Research (CEPR)

Abstract: This paper considers the case for and against 'the treasury view' - the idea that in a downturn, government spending has no effect on economic activity or unemployment. The report covers three areas: the evidence for expansionary fiscal contraction – the idea that somehow cutting budget deficits will lead to an increase in growth, even in the middle of a downturn; the logic of expansionary contraction; and finally, a more sustainable path for the economy that is not designed to generate inequality in the same way that the pre-crisis economy was.

Keywords: austerity; fiscal stimulus; deficit spending (search for similar items in EconPapers)
JEL-codes: E E2 E3 E32 E6 E62 E65 H H6 H62 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2012-06
New Economics Papers: this item is included in nep-mac and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:epo:papers:2012-17

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