It is not a question of whether fiscal policy is a tool used by government but rather by what degree is it used? The unprecedented GR has seen the UK Coalition Government use fiscal policy in a number of guises and, it could be argued to some success. This judgement in itself is normative and as the info graphic on the right, The Squeeze, shows your interpretation of ‘success’ is surely determined by how much your standard of living has been compromised. As you read through the articles be aware of the fp transmission mechanism and concentrate on developing your chains of analysis, diagrams and evaluations. There is a video included giving an explanation of the conciliatory AS curve as well.
are you better off? who is feeling the pinch the most? spending and the multiplier truth or bluster tim harford unintended consequences marginal tax rates tax and business vat increase institute of fiscal studies