The West German Council of Economic Experts has proposed an intermediate-range view of fiscal policy which they describe as the cyclically neutral budget (CNB). The first step in constructing the CNB is to select a base year of full employment during which the posture of fiscal policy was,...

Many governments have recently expressed concern that a rise in direct personal taxes will not have its intended restrictive effect because of the fear that the reduction in disposable income caused by the tax increase will be offset by a rise in wages. This paper examines the consequences of...