Section 5: Government Policy
Section 5:
Government Policy
Governments tax economic agents and then spend tax revenues, plus manipulate interest rates in the economy. They do this in part to try to prevent booms and busts in output, control inflation and to increase overall growth of output. Which policies work, and why? For example, is it a good idea for the government to spend during a recession via a 'fiscal stimulus'? This section expands the model to include a government sector and analyses various forms of government policy. It concludes that some forms of government policy can work, sometimes.
Lecture 20 - Government Expenditure
Lecture 24 - Summary