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Forum Post: Harvard Research on Stimulus and reducing Debt

Posted 2 years ago on Aug. 16, 2012, 7:11 a.m. EST by Emalm (12)
This content is user submitted and not an official statement

Abstract from the Harvard Study

http://www.economics.harvard.edu/faculty/alesina/files/Large%2Bchanges%2Bin%2Bfiscal%2Bpolicy_October_2009.pdf

We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As for fiscal adjustments those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions. We confirm these results with simple regression analysis.

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[-] -1 points by john23 (-272) 2 years ago

good post

[-] -1 points by funkytown (-374) 2 years ago

Then why does this administration continue to discus and support stimulus? It's just a political device.