1. How little we know about deficit policy effects
- Author
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Miller, Preston J. and Roberds, William
- Subjects
Deficit financing -- Research ,Interest rates -- Effect of monetary policy on ,Fiscal policy -- Research ,Banking, finance and accounting industries ,Business - Abstract
Deficit policy effects are examined in the light of existing theories. Effects cannot be established as a result of the interplay of variables since the variables are flawed by identification problems. Shifting government policies and political decisions are examples of variables that have to be properly identified and incorporated in economic models. Bernheim and Bagwell (1988) and Abel and Bernheim (1991) were successful in showing Ricardian equivalence within given models. It is up to future researchers to construct similar models that can be matched to the data.
- Published
- 1992