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September 01, 2020 10:27am
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The Fed Understands the Romer/Sumner Tax Cut Argument (Too Bad Congress is Brain Dead.)

Christina Romer and I have both advocated employer-side payroll tax cuts. When nominal wages are sticky, that shifts the SRAS to the right, and boosts output if the Fed is targeting inflation. On the other hand employee-side cuts boost AD, and may be ineffective if the Fed targets inflation. What does the Fed itself think? [...]
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