Public debate about the effects of government spending heated up after record-large stimulus packages were enacted to address the fallout of the fi nancial crisis. Almost as noticeable as the discord was the absence of consensus among prominent economists on the issue. While it seems a simple...

The intended effects of a government policy can be distorted by the public’s expectations about how strictly it will be enforced. If households and businesses cannot be certain that a policy will remain unchanged over its scheduled tenure, they will adjust their response to it to reflect this...

The United States is not the first advanced modern economy to face a serious federal budget challenge. A number of countries have seen their debt rise to unacceptable levels in recent decades, and they have taken steps to rein it in. We explore the approaches that Canada and the United Kingdom...