Fiscal multiplier, Eurozone Crisis, and Austerity Policy

The other day, I made a blog post about the Greek debt crisis. After reading Professor Smitka’s comment, I wondered how effective/ineffective the IMF’s austerity policy has been in European debtor countries like Greece. Gechert et al. attempt to answer this question by estimating changes in fiscal multiplier during an economic downturn in […]

Government Efficiency: A Natural Experiment

…sequestrian offers a “natural” experiment to test views of government… Microeconomists will thank Congress for providing a natural experiment to test competing views of government. One is that government is unnecessary, or at least inefficient in an allocative sense — lots of money on things that aren’t very useful (and perhaps not enough money on […]