A traditional function of the central bank is to control the price level. The fiscal theory of the price level challenges this assumption, arguing instead that the fiscal authority's budgetary policy is the primary determinant of the price level. The authors provide a critical review of the...

A study of the magnitudes of tax increases, transfer cuts, or reductions in government purchases that would be needed to rectify the huge imbalance in the generational stance of U.S. fiscal policy, concluding that congressionally proposed outlay reductions in nondefense and non-Social Security...

Price stability is an important goal of public policy. To reach this goal, two key questions must be addressed: How can price stability be achieved? And, how much price stability is desirable? The authors review the fiscal theory of the price level, with special emphasis on its implications for...

An examination of the continuing generational imbalance in U.S. fiscal policy, showing that under current policy, future generations will have to pay almost half of their lifetime labor incomes in net taxes to balance the government's book--more than 70% greater than the 28.6% today's newborns...

A study of the welfare implications of some basic structural features of the U.S. tax code, including the tax deductibility of depreciation and the practice of taxing labor income differently than capital income. The results show that long-run welfare and output can be improved by a policy of...

The authors report each country’s total intertemporal public liability as the sum of its explicit outstanding debt and the present values of its implicit liabilities—the excess of projected transfers and government purchases over tax revenues. They find rapid, persistent population aging in...

For some time, the use of monetary and fiscal policies to smooth business cycle fluctuations has taken a back seat to longer term objectives of restoring price stability and fiscal balance. More recently, however, weaker economic performance in some of the world’s economies, most notably in...

Since the invention of money, pressure to finance government debt and deficits, directly or indirectly, has been the single most important driver of inflation. It is not at all clear, however, that improved fiscal policy has been the main driver of the recent disinflation. ; Whatever the...

For some time, the use of monetary and fiscal policies to smooth business cycle fluctuations has taken a back seat to longer term objectives of restoring price stability and fiscal balance. More recently, however, weaker economic performance in some of the world’s economies, most notably in...

For some time, the use of monetary and fiscal policies to smooth business cycle fluctuations has taken a back seat to longer term objectives of restoring price stability and fiscal balance. More recently, however, weaker economic performance in some of the world’s economies, most notably in...