Some economists, like Robert Barro and John Taylor, were skeptical about the effectiveness of the American Recovery and Reinvestment Act and cited ________ as the reason.

Question

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Ricardian equivalence is the idea that consumers will anticipate future tax increases to pay for government spending and will therefore save any extra income received from stimulus measures, rather than increasing their consumption. Barro and Taylor argued that this logic applied to the American Recovery and Reinvestment Act, and that any money spent by the government would be offset by increased saving by consumers, rendering the stimulus ineffective.

Some Economists, Like Robert Barro and John Taylor, Were Skeptical