November 30, 2012 at 08:35 AM EST
The Fiscal Cliff: a non-Keynesian Analysis
Much of the discussion and analysis of the fiscal cliff is purely Keynesian: incentives are ignored and it is assumed that moving money around has a multiplier effect (negative in this case, because it involves moving money “from the consumer” to the Treasury). Here’s a back of the envelope on incentives: Emergency unemployment benefits are [...]
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