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When fiscal policy might make matters worse

From the new 4th edition of Cowen and Tabarrok, Modern Principles of Economics: Increased spending and tax cuts have to be paid for. Thus, increased spending and tax cuts today will tend to be followed by decreased spending or tax increases tomorrow. When tomorrow comes and spending is reduced and taxes rise, aggregate demand will […] The post When fiscal policy might make matters worse appeared first on Marginal REVOLUTION.
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