Keynesian Fiscal Stimulus: What Have We Learned From The Great Recession?

What have we learned from the Great Recession about Keynesian fiscal stimulus? This paper contains five sections that develop the following five points: there is confusion about what constitutes Keynesian fiscal stimulus; Economists are deeply divided about fiscal stimulus; A fundamental error has been committed by an influential economist in estimating the recession magnitude of the Keynesian multiplier; A fundamental error has been committed by two influential economists in their analysis of the impact of the 2008 tax rebate on consumption spending; Advocates of fiscal stimulus in recession should support keeping government debt low in prosperity.

Provided by: University of Delaware Topic: CXO Date Added: Aug 2011 Format: PDF

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