The Supply-Side Consequencesof U.S. Fiscal Policy in the 1980s

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Quarterly Review

The Supply-Side Consequences
of U.S. Fiscal Policy in the 1980s

Spring 1992Volume 17, Number 1

Authors: M.A. Akhtar and Ethan S. Harris

Fiscal policy changes in the 1980s had several possible implications for the long-run performance of the U.S. economy. The authors review the impact of tax reductions on saving, investment, and work effort, the implications of increased federal deficits for national saving and private investment, and the effect of shifts in the composition of government spending on public capital formation and on research and development. Using results from the empirical literature, the authors attempt to quantify the effects of these fiscal changes on the nation's economic potential.

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20 pages / 1,753 kb

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