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Unformatted text preview: 1. Fiscal policy is neutral in this situation iii. Taxes are used for the fallowing year g. Problems i. Problems of timing 1. Recongnition lag a. Takes 3-4 months 2. Admin lag 3. Operation lage ii. Political considerations 5. Debt and GDP a. Substantive issues i. Income distribution ii. Incentives iii. Foreign-owned public debt b. Crowding-out effect revisited i. Burden on future generations ii. Public investments as an offset 6. Leading indicators of Decrease of GDP a. Average workweek i. vacations b. Initial claims for unemployment insurance c. New orders for consumer goods d. Vendor performance e. New orders for capital goods f. Building permits for houses g. Stock prices h. Money Supply i. Interst-rate spread j. Consumer expectations...
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