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How Little We Know About Budget Policy Effects

Staff Report 120 | Published April 1, 1989

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Authors

Preston J. Miller Former Vice President and Monetary Adviser

William Roberds

How Little We Know About Budget Policy Effects

Abstract

Using a simple model, we show why previous empirical studies of budget policy effects are flawed. Due to an identification problem, those studies’ findings can be shown to be consistent with either policies mattering or not.


Published in: _Quarterly Review_ (Vol. 16, No. 1, Winter 1992, pp. 2-11) https://doi.org/10.21034/qr.1611.