Ambulance Economics: The Pros and Cons of Fiscal Stimuli

W. Max Corden ()

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: This lecture deals not with the causes of the world financial crisis nor how to forecast or avoid one in the future, nor how to revive the financial sector, but rather with the crucial emergency "ambulance" policy of fiscal stimulus. What are the main effects of stimuli policies, and, in particular, the post-crisis effects? What are the main decisions to make and practical problems involved? What difference does a preexisting public debt problem make? Seven arguments against fiscal stimuli will be examined. Finally, fundamental ideological issues, namely government failure versus market failure, and fear of inflation versus fear of depression, will be noted.

Keywords: financial crisis; depression; fiscal policy; Keynes (search for similar items in EconPapers)
JEL-codes: E12 E62 H62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mac
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:pas:papers:2009-18

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