User Discretion Advised: Fiscal Consolidation and the Recovery

William Scarth Author- Workplace-Name: McMaster University

C.D. Howe Institute Commentary, 2014, issue 412

Abstract: Since the financial crisis in 2008, controversy has existed over whether governments should use fiscal policy in an attempt to stimulate economic activity, or whether fiscal consolidation is preferred. Those who call for continued stimulation focus on how slow and incompletely shared our recovery has been, while those favouring austerity argue that postponement of deficit and debt reduction retards business expansion, thereby hurting the recovery. This study evaluates the many strands of this fiscal policy debate, and applies the lessons to the decisions currently facing the federal and Ontario governments.

Keywords: Fiscal; Policy; and; Tax; Competitiveness (search for similar items in EconPapers)
JEL-codes: E61 E63 H62 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:cdh:commen:412

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