This paper provides a numerical illustration of how an international carbon treaty might work. The simulations in this paper using 2004 data on carbon emissions and per capita GDP from 178 countries suggest that high-income countries might be much better off collectively compensating low-income...

What have we learned from the Great Recession about Keynesian fiscal stimulus? This article contains five sections that develop the following five points: (1) There is confusion about what constitutes Keynesian fiscal stimulus; (2) Economists are deeply divided about fiscal stimulus; (3) A...

This economist argues that fiscal and monetary stimulus likely saved us from a Great Depression. He explains clearly how and why Keynesian stimulus works, but he also argues that deficit spending cannot go on indefinitely. When the economy strengthens, that is the time to deal with government...

A sobering lesson from the Great Recession is that widespread worry about government debt generates strong political resistance to enacting a fiscal stimulus large enough to overcome a severe recession. Fortunately there is a way to implement fiscal stimulus without increasing government debt....

Medicare for seniors has been evolving for half a century and has performed very satisfactorily. Extending Medicare to cover everyone regardless of age would have several advantages. It would provide automatic coverage and portability for everyone regardless of employment, health status, income,...

It has been recognized that conversion of an income tax to a consumption tax can increase aggregate saving even if each household maintains a constant propensity to save. The reason is heterogeneity: the variation in the propensity to save among households. How much of an increase in saving is...

The new Federal Reserve chairman, Ben Bernanke, has inherited a hot seat. This economist analyzes four of his key speeches in recent years to try to explain his theoretical view of fiscal and monetary policy. Bernanke's writings are far more lucid than Alan Greenspan's. Seidman concludes that...

Fiscal stimulus has long been de-emphasized as a policy tool in the United States. This economist takes a longneeded look at the most prominent research in the field, reviews it for Challenge , and concludes that it is time to think about fiscal stimulus again.