Thursday, October 1, 2009

Government Stimulus and Empirical Evidence

Robert Barro concludes in today's WSJ article that when looking at the US:
"The existing empirical evidence on the response of real gross domestic product to added government spending and tax changes is thin."
Simply put, he argues that "government stimulus packages don't work," which brings up the question about whether the recent "consumer voucher" policy and stimulus packages in Taiwan worked or not.

If I recall correctly, The Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan in Taiwan has given estimates proving that consumer vouchers worked, though moderately.

This points to an interesting research topic: perhaps people in Taiwan who are interested in Macroeconomics could investigate empirically how government stimulus packages are affecting real GDP.

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