Internal Objectives: Empirical Evidence
This chapter assembles empirical evidence from a number of sources that throws light on the probable validity of the hypotheses raised in Chapter 2: namely, that different forms of macroeconomic stimulus have different relative effects on prices for a given effect on real output or employment; in particular, that tax cuts are likely to have less upward effect on prices than government outlays (and some types of tax cut may even have a downward effect on prices) for any given real stimulus to output or employment, and that a monetary expansion is likely to have the greatest upward effect on prices for any given real stimulus.
KeywordsInterest Rate Monetary Policy Government Outlay Real Output Macroeconomic Policy
Unable to display preview. Download preview PDF.