Keith M. Carlson examines the importance of money growth assumptions in the assessment of this ratio. Simulations of a modified version of the St. Louis model are used to determine the effect of alternative growth paths of M1 on federal deficits and the federal debt-GNP ratio.
Mack Ott examines the relation between the value of additions to business capital equipment and plant and the Accelerated Cost Recovery System (ACRS) enacted in 1981. ACRS has been controversial since its enactment because it reduced effective corporate tax rates; it is a central issue in the administration’s current tax reform proposal.
John A. Tatom explains the links between the variability of money growth and the variability of interest rates and between the latter and economic performance. Tatom describes the theoretical channels through which an increase in risk affects the economy, including how it reduces both the demand for and the supply of current goods and services.
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