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THIS PAPER OFFERS NEW EMPIRICAL ESTIMATES OF THE DIFFERENCE IN CONSUMER SPENDING PROPENSITIES FROM TEMPORARY AND PERMANENT INCOME TAX CHANGES. OVER A 1-YEAR PLANNING HORIZON, A TEMPORARY TAX CHANGE IS ESTIMATED TO HAVE ONLY A LITTLE MORE THAN HALF THE IMPACT OF THE SAME SIZE PERMANENT CHANGE, AND REBATE IS ESTIMATED TO HAVE ONLY ABOUT 38 PERCENT OF THE IMPACT.

The lamppost theory of economic policy -- Clashing civilizations -- Lost horizons? -- Madison's curse meets Madison Avenue -- The media are the messengers -- Murphy's law of economic policy -- Wanted: hard-headed but soft-hearted policies -- Trade disagreements -- With liberty and inequality for all? -- The political quicksand of tax reform -- Toward remedies: moving the needle -- Toward remedies: moving the line -- Last word: on bridging the gap

Economic Policy and the Great Stagflation discusses the national economic policy and economics as a policy-oriented science. This book summarizes what economists do and do not know about the inflation and recession that affected the U.S. economy during the years of the Great Stagflation in the mid-1970s. The topics discussed include the basic concepts of stagflation, turbulent economic history of 1971-1976, anatomy of the great recession and inflation, and legacy of the Great Stagflation. The relation of wage-price controls, fiscal policy, and monetary policy to the Great Stagflation is also e

Over the last two decades, communication has become an increasingly important aspect of monetary policy. These real-world developments have spawned a huge new scholarly literature on central bank communicationmostly empirical, and almost all of it written in this decade. We survey this evergrowing literature. The evidence suggests that communication can be an important and powerful part of the central bank's toolkit since it has the ability to move financial markets, to enhance the predictability of monetary policy decisions, and potentially to help achieve central banks' macroeconomic objectives. However, the large variation in communication strategies across central banks suggests that a consensus has yet to emerge on what constitutes an optimal communication strategy

Contents -- Preface -- Part I. On Learning by Asking -- Chapter 1. Why Study Price Stickiness? Why This Way? -- Chapter 2. Antecendents -- Chapter 3. Research Design -- Part II. The Basic Findings -- Chapter 4. Wouldn't It Be Nice to Know...? -- Chapter 5. Basic Results on the Twelve Theories -- Part III. Detailed Findings on Each Theory -- Chapter 6. Nominal Contracting -- Chapter 7. Implicit Contracts -- Chapter 8. Judging Quality by Price -- Chapter 9. Psychological Pricing Points -- Chapter 10. Procyclical Elasticity of Demand

This is the thirty-fifth volume in the Brookings Studies of Government Finance series. In the first of its four essays, ""Analytical Foundations of Fiscal Policy," Alan S. Blinder of Princeton University and Robert M. Solow of the Massachusetts Institute of Technology survey the theoretical and empirical underpinnings of fiscal policy. After discussing how the influence of fiscal policy on macroeconomic activity ought to be assessed, the authors examine and find inadequate the dictum that government should balance the budget rather than the economy. They defend--again both theoretically and em