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- Title
Why Fiscal Stimulus is Likely to Work.
- Authors
Fatás, Antonio; Mihov, Ilian
- Abstract
We provide an overview of the effectiveness of fiscal policy actions by summarizing evidence from empirical and theoretical studies. Empirically, expansionary policy is found to have output multipliers greater than one. Given current economic conditions, we argue that the fiscal cost of not stabilizing the economy is likely to be much higher than the cost of a deficit that helps the economy go faster towards a recovery path.
- Subjects
COST effectiveness; ECONOMIC stabilization; ECONOMIC policy; PUBLIC spending; MONETARY policy; FISCAL capacity; LONG run (Economics); INDUSTRIAL costs; ECONOMIC efficiency; COST control
- Publication
International Finance, 2009, Vol 12, Issue 1, p57
- ISSN
1367-0271
- Publication type
Article
- DOI
10.1111/j.1468-2362.2009.01235.x