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How Not to Stimulate the Economy

Abnormal Returns found this 12/22/2008 on gregmankiw.blogspot.com

In thinking through the fiscal policy options and their implications, it might be useful to compare a few hypothetical, fanciful scenarios. Suppose that the federal government borrows some money and then... Case A : uses the money to give a lump-sum payment (such as a tax rebate) to Bob, who ...