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December 1984

Fiscal Policy in Macro Theory: A Survey and Evaluation

by Karl Brunner

The author reviews the fiscalist-monetarist debate of the late sixties and early seventies and evaluates the empirical work bearing on the central questions addressed at the time. He then discusses the range of issues raised by the neoclassical cum rational expectations approach and examines a number of problems recently associated with transitory and permanent deficits. Finally, he assesses the consequences of our intellectual position with respect to fiscal policymaking and the choice of fiscal regime.