The Party of Fiscal Responsibility Potential recallee Gray Davis has a plan to deal with California’s $38 billion deficit by raising taxes by $8b and reducing spending by $18b. In…

…demand fiscal responsibility from their state government. If a state expects billions of dollars in federal aid whenever they cut taxes too much, then it is in that state’s economic…

Fiscal austerity–or deficit cutting–is the subject of much current debate. As Europe proves, severe austerity can slow growth or lead to recession. Despite periodic slowdowns, the US economy is on…

…outflows only when countries have good macroeconomic fundamentals, as measured by their records of GDP growth, inflation, fiscal policy and their current account balances, or good institutions. Iceland’s use of…

…premature withdrawal of monetary accommodation as fiscal balances continue consolidating. Given still large output gaps, very low inflation, and ongoing fiscal consolidation, monetary policy should remain accommodative in advanced economies….

…well as their macroeconomic policies. Fernanda Nechio of the Federal Reserve Bank of San Francisco, for example, shows that exchange rate depreciations of emerging markets are linked to their fiscal…

…to Secular Stagnation… higher inflation target more government spending redistribution of income As such, Paul Krugman today mentioned the need for a higher inflation target and maybe permanent fiscal stimulus……

…I agree that economists focus too much on fiscal solutions. In my opinion, the real problem is low labor share, which expansionary fiscal policy has no guarantee to solve. He…

…national economy, it is not possible for European countries unless they achieve fiscal coordination. This is extremely difficult due to EU rules requiring unanimity on votes affecting direct taxation (personal…

…are important, austerity during recessions is destructive, fiscal stimulus is useful) might be losing the substantive battle. Econ blog arguments are fun, so I’ll play devil’s advocate squared — angel’s…