An Accelerator Tied to a Brake: Fiscal Stimulus Under a Floating Exchange Rate

Tom Valentine

Agenda - A Journal of Policy Analysis and Reform, 2011, vol. 18, issue 1, 35-40

Abstract: This paper examines the widely accepted proposition that the fiscal stimulus saved Australia from the worst effects of the Global Financial Crisis (GFC). It presents theoretical and empirical arguments supporting the view that fiscal stimulus is ineffective in a floating exchange-rate regime. It underlines this by comparing Australia's experiences in the East Asian Crisis of 1997 and the GFC of 2008-09. It concludes that a depreciating exchange rate protected the Australian economy in the 1997 crisis, but was prevented from doing so in the 2008-09 crisis by the fiscal stimulus.

Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://press-files.anu.edu.au/downloads/press/p115201/pdf/ch045.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:acb:agenda:v:18:y:2011:i:1:p:35-40

Access Statistics for this article

More articles in Agenda - A Journal of Policy Analysis and Reform from Australian National University, College of Business and Economics, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().