Rethinking the Role of Fiscal Policy
As recently as two years ago there was a widespread consensus among economists that fiscal policy is not useful as a countercyclical instrument. Now governments in Washington and around the world are developing massive fiscal stimulus packages, supported by a wide range of economists in universities, governments, and businesses.
Why has this change occurred? What are the principles for designing a potentially useful fiscal stimulus? And what will happen if the current fiscal stimulus fails?
Published Versions
Martin Feldstein, 2009.
"Rethinking the Role of Fiscal Policy,"
American Economic Review,
American Economic Association, vol. 99(2), pages 556-59, May.
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