Principles of Macroeconomics / Unit 14 MAC 1323 short lesson, about 20 seconds
The Standardised Employment Budget
Captions available
The idea
The standardised employment budget asks what the deficit would be if the economy were at potential output. That strips the automatic stabilisers out and leaves the part of the balance that policy chose.
In practice
In a recession it is smaller than the actual deficit; in a boom it is larger.
Where people slip
The gap between the two measures is what the stabilisers did.
Your place on the trail
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