News Column

New Macroeconomics Study Findings Have Been Reported by Investigators at International Monetary Fund (To starve or not to starve the beast?)

July 4, 2014



By a News Reporter-Staff News Editor at Economics Week -- Fresh data on Macroeconomics are presented in a new report. According to news originating from Washington, District of Columbia, by VerticalNews correspondents, research stated, "For thirty years, prominent voices have advocated a policy of starving the beast - cutting taxes to force government spending cuts. This paper analyzes the macroeconomic and welfare consequences of this policy using a two-country general equilibrium model."

Our news journalists obtained a quote from the research from International Monetary Fund, "Under several strong assumptions, the policy, if fully implemented, produces domestic output and welfare gains accompanied by losses elsewhere. But negative effects can easily arise in the presence of longer policy implementation lags, utility-enhancing government spending, and productive government capital."

According to the news editors, the research concluded: "Overall, the analysis finds no support for the idea that starving the beast is a foolproof way towards higher output and welfare."

For more information on this research see: To starve or not to starve the beast? Journal of Macroeconomics, 2014;39():1-23. Journal of Macroeconomics can be contacted at: Louisiana State Univ Pr, Baton Rouge, La 70893 Usa. (Elsevier - www.elsevier.com; Journal of Macroeconomics - www.elsevier.com/wps/product/cws_home/622617)

The news correspondents report that additional information may be obtained from M. Kumhof, Int Monetary Fund, Washington, DC 20431, United States. Additional authors for this research include D. Laxton and D. Leigh.

Keywords for this news article include: Washington, United States, Macroeconomics, District of Columbia, North and Central America

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Source: Economics Week


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