CIAO DATE: 05/2009

Why Fiscal Stimulus Is Unlikely to Work

March 2009

American Enterprise Institute for Public Policy Research

Abstract

This paper reviews the empirical literature on countercyclical policy. It finds that three types of countercyclical policies have been studied in the literature: built in stabilizers, temporary policy changes, and more permanent policy changes. The literature is decidedly mixed on the effectiveness of temporary changes, but more hopeful concerning the other two.

Resource link: Why Fiscal Stimulus Is Unlikely to Work [PDF] - 219K