Fiscal headwinds: Is the other shoe about to drop?

Brian Lucking and Daniel Wilson

FRBSF Economic Letter, 2013, issue june3

Abstract: Federal fiscal policy during the recession was abnormally expansionary by historical standards. However, over the past 2 years it has become unusually contractionary as a result of several deficit reduction measures passed by Congress. During the next three years, we estimate that federal budgetary policy could restrain economic growth by as much as 1 percentage point annually beyond the normal fiscal drag that occurs during recoveries.

Keywords: Fiscal; policy; -; United; States (search for similar items in EconPapers)
Date: 2013
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