Eurozone stimulus: A myth, some facts, and estimates
|Publication:||Policy Letter No. 2, 2009|
|Topic Area:||Macro Finance|
|Keywords:||fiscal stimulus packages|
Eurozone governments have engaged in substantial fiscal stimulus. This column argues against further fiscal measures, claiming that forward-looking firms and households will cut their expenditure in response to governmental expansions. It warns that further fiscal efforts risk eroding financial and monetary policies that are combating the crisis.
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