Martín Gonzalez-Eiras, Dirk Niepelt, 11 October 2016

The US fiscal system underwent a radical transformation in the 1930s. This column proposes a micro-founded general equilibrium model that blends politics and macroeconomics to explain the transformation. It rationalises tax centralisation and intergovernmental grants as the equilibrium response to the Sixteenth Amendment, which introduced federal taxation. The theory can also be used to forecast federal and regional taxes and government spending.

Hugh Rockoff, 04 October 2014

World War I profoundly altered the structure of the US economy and its role in the world economy. However, this column argues that the US learnt the wrong lessons from the war, partly because a halo of victory surrounded wartime policies and personalities. The methods used for dealing with shortages during the war were simply inappropriate for dealing with the Great Depression, and American isolationism in the 1930s had devastating consequences for world peace.

Timothy Hatton, 09 September 2010

The recent recession that followed the global crisis has often been compared with the Great Depression. This column argues that an important but neglected lesson from that period is that policymakers should be firmly focused on fostering labour market flexibility and maintaining the employability of those out of work, rather than on short fixes that actually cause unemployment to persist.

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