Working Paper: NBER ID: w7496
Authors: Alberto Alesina
Abstract: Current surpluses in the U.S. have been achieved by a combination of a strong economy, low interest rates, and sharp cuts in defence spending. These surpluses follow a period (the eighties) of rather exceptional budget deficits. This paper investigates the origin, size, and expected future patterns of the U.S. budget balance. It discusses how different political forces may generate alternative fiscal scenarios for the U.S. in the next decade.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| strong economy (P17) | current budget surpluses (H62) |
| low interest rates (E43) | current budget surpluses (H62) |
| significant cuts in defense spending (H56) | current budget surpluses (H62) |
| strong economy, low interest rates, significant cuts in defense spending (E65) | current budget surpluses (H62) |
| current budget surpluses (H62) | reversal in fiscal policy (E62) |