Does Fiscal Policy Matter?

James Tobin

Chapter 4 in Macroeconomic Management, 1995, pp 51-68 from Palgrave Macmillan

Abstract: Abstract Strange proposititions are commonplace in macroeconomic commentary these days; the world has been turned upside down. The federal government is about to increase real defence spending over the next several fiscal years by 9 per cent annually, to cut personal income tax rates by 10 per cent both this year and next, and to phase in drastic reductions in taxation of business investments in equipment and structures. Similar budgets in the past have invariably made the economy more prosperous, creating jobs and lowering unemployment, speeding the growth of production, raising profits. Consider, for example, 1940–41, 1950–52 and 1966–69.

Keywords: Interest Rate; Monetary Policy; Labour Supply; Real Interest Rate; Private Saving (search for similar items in EconPapers)
Date: 1995
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DOI: 10.1007/978-1-349-24280-1_4

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