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Wednesday, August 27, 2014

Filling the Gap: Monetary Policy or Tax Cuts or Government Spending?

Simon Wren-Lewis (a bit technical):

Filling the gap: monetary policy or tax cuts or government spending: Suppose there is a shortfall in aggregate demand associated with a rise in involuntary unemployment in a simple closed economy with no capital. Do we try and raise private consumption (C) or government consumption (G)? If the former, why do we prefer to use monetary policy rather than tax cuts? ...

    Posted by on Wednesday, August 27, 2014 at 07:00 AM in Economics, Fiscal Policy, Monetary Policy | Permalink  Comments (18)


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