In 2017, an article in the New York Times quoted Douglas Holtz-Eakin, former director of the Congressional
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In 2017, an article in the New York Times quoted Douglas Holtz-Eakin, former director of the Congressional Budget Office, as arguing that “with the economy back to near full employment, conventional tax cuts or stimulus spending won’t have that much of an effect. What is needed are policies that genuinely augment the supply side of the economy.”
a. If the economy is at full employment, what economic variables will conventional tax cuts or stimulus spending not affect much? What variables might these policies affect?
b. What does Holtz-Eakin mean by “policies that genuinely augment the supply side of the economy”?
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