U.S Fiscal Imbalances (Gruss & Torres)

Macroeconomic and welfare costs of U.S fiscal imbalances by Berthand Gruss and José L. Torres published by IMF, indicated by Arthur Garbayo. “In this paper we use a general equilibrium model with heterogeneous agents to assess the macroeconomic and welfare consequences in the United States of alternative fiscal policies over the medium-term. We find that failing to address the fiscal imbalances associated with current federal fiscal policies for a prolonged period would result in a significant crowding out of private investment and a severe drag on growth.”