Typically, governments apply stimulus when an economy is in decline and then reverse course when conditions strengthen. But the 2017 US Tax Cuts and Jobs Act, implemented well into the eighth year of America’s expansion, seeks to boost and extend robust output. According to economists Tim Mahedy and Daniel J. Wilson in this brief but cogent analysis, evidence suggests such incentives are less effective during economic upswings than they are during downturns. getAbstract recommends this insightful research to economists and analysts.
In this summary, you will learn
- How governments normally apply fiscal policy,
- Why the 2017 US Tax Cuts and Jobs Act is unusual, and
- What research says about the potential outcomes of the 2017 tax cuts.
About the Authors
Tim Mahedy is an economist at Bloomberg LP, and Daniel J. Wilson is an economist at the Federal Reserve Bank of San Francisco.