Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

My other question is really quite different. The forecast depends not insignificantly on the analysis related to the macroeconomics of fiscal policy. Of course, there’s a very old debate about that. On the tax side particularly, one view obviously is that tax cuts don’t do much of anything for short-run activity. Can you talk a little more about the confidence intervals around the estimates of the effects of fiscal policy? There are two issues. One is what kind of tax bill we might get. The other is, given some assumption about the macro effects of that over the next eighteen months or so, what sort of confidence intervals do you put around that? Certainly over the years a position has emerged that says those effects are vanishingly small.

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