Yulia Slavina

Erica York: Cutting taxes to boost spending may not always grow economy

Erica York: Cutting taxes to boost spending may not always grow economy
Tax cuts and economic growth debate

Erica York discusses the commonly held view that increasing consumer and business spending—through measures such as tax cuts—can help grow the economy. She notes that while giving consumers and businesses more money to spend may seem straightforward, this perspective is not always the best way to understand economic growth outside of recessions.

According to York, a deeper analysis is required to explain what drives the economy during periods that are not marked by recession.

York’s perspective builds on her earlier examination of how new expensing provisions can influence business investment decisions, spotlighting the importance of structural tax measures beyond immediate consumer incentives. She has also addressed the potential fiscal impact of policy shifts such as tariffs, underscoring the multifaceted nature of factors driving economic expansion outside traditional cycles.

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