To Starve or Not to Starve the Beast? /

For thirty years prominent voices have advocated a policy of starving the beast cutting taxes to force government spending cuts. This paper analyzes the macroeconomic and welfare consequences of this policy using a two-country general equilibrium model. Under several strong assumptions the policy, i...

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Bibliografiske detaljer
Hovedforfatter: Kumhof, Michael
Andre forfattere: Laxton, Douglas, Leigh, Daniel
Format: Tidsskrift
Sprog:English
Udgivet: Washington, D.C. : International Monetary Fund, 2010.
Serier:IMF Working Papers; Working Paper ; No. 2010/199
Online adgang:Full text available on IMF
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245 1 0 |a To Starve or Not to Starve the Beast? /  |c Michael Kumhof, Daniel Leigh, Douglas Laxton. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2010. 
300 |a 1 online resource (36 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a For thirty years prominent voices have advocated a policy of starving the beast cutting taxes to force government spending cuts. This paper analyzes the macroeconomic and welfare consequences of this policy using a two-country general equilibrium model. Under several strong assumptions the policy, if fully implemented, produces domestic output and welfare gains accompanied by losses elsewhere. But negative effects can easily arise in the presence of longer policy implementation lags, utility-enhancing government spending, and productive government capital. Overall, the analysis finds no support for the idea that starving the beast is a foolproof way towards higher output and welfare. 
538 |a Mode of access: Internet 
700 1 |a Laxton, Douglas. 
700 1 |a Leigh, Daniel. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2010/199 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2010/199/001.2010.issue-199-en.xml  |z IMF e-Library