In recent years, a case has been made against the use of fiscal policy for stabilization purposes. Real business cycle theory, which portrays the economy as being in global intertemporal equilibrium, concludes that fiscal policy is useless, while the Ricardian equivalence hypothesis concludes...

For various reasons ? empirical, technical and casual ? modern (neo-classical) growth theory has centered its attention on steady-state exponential growth. When the models are intented to serve as a guide to policy, the tacit presumption is that the goal of growth policy is to increase the...