The recent recession has brought fiscal policy back to the forefront, with economists and policy makers struggling to reach a consensus on highly political issues like tax rates and government spending. At the heart of the debate are fiscal multipliers, whose size and sensitivity determine the...

Biographical note: BarroRobert: Robert J. Barro is Professor of Economics, Harvard University, and has written widely on macroeconomic and monetary economics. He is the author of Macroeconomics and the editor of Modern Business Cycle Theory.