Realistic model shows smaller impact of government spending and tax cuts
The article analyzes the effects of macroeconomic policies in the United States by using a model that considers realistic features of the global economy. The researchers found that government spending, tax cuts, and trade have smaller impacts on the economy when these realistic features are taken into account. The model was able to reasonably track the actual gross domestic product of the United States from 1990 to 2009. The study suggests that further improvements are needed before the model can be used for policy decisions.