Modern Perspectives on Stabilization Policies

22 Pages Posted: 15 Nov 2005

See all articles by Jordi Galí

Jordi Galí

Universitat Pompeu Fabra - Centre de Recerca en Economia Internacional (CREI); Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

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Date Written: June 1, 2005

Abstract

The present paper describes recent research on two central themes of Keynes' General Theory: (i) the social waste associated with recessions, and (ii) the effectiveness of fiscal policy as a stabilization tool. The paper also discusses some evidence on the extent to which fiscal policy has been used as a stabilizing tool in industrial economies over the past two decades.

Keywords: Business cycles, inefficient allocations, government spending multiplier, non-Ricardian households, countercyclical policies

JEL Classification: E32, E63

Suggested Citation

Gali, Jordi, Modern Perspectives on Stabilization Policies (June 1, 2005). Available at SSRN: https://ssrn.com/abstract=847695 or http://dx.doi.org/10.2139/ssrn.847695

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Centre for Economic Policy Research (CEPR)

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