Faulting Internationally Coordinated Fiscal Stimulus

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Title Faulting Internationally Coordinated Fiscal Stimulus
Author Makin, Anthony John
Journal Name World Economics
Year Published 2010
Place of publication United Kingdom
Publisher Economic and Financial Publishing
Abstract Fiscal policy has been actively deployed globally by G20 governments to counter the impact of the global financial crisis on the real sectors of their economies. This coordinated fiscal response has involved a mix of new public expenditure, including on infrastructure, tax relief and increased income transfers to favoured groups. In the end, the case for fiscal stimulus rests on the presumption that it works in theory, along lines first proposed by Keynes. Yet, Keynesian fiscal activism founded on this presumption is contestable on numerous theoretical and practical grounds. This paper addresses key concerns about the consequences of using fiscal stimulus. It proposes that discretionary fiscal measures that have increased budget deficits and public indebtedness for economies worldwide entail significant macroeconomic costs and risks, and that, as a corollary, reducing unproductive public spending can be expansionary.
Peer Reviewed Yes
Published Yes
Publisher URI http://www.world-economics-journal.com/
Copyright Statement Copyright 2010 Economic and Financial Publishing. The attached file is reproduced here in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
Volume 11
Issue Number 3
Page from 25
Page to 40
ISSN 1468-1838
Date Accessioned 2010-12-02
Language en_AU
Faculty Griffith Business School
Subject Macroeconomic Theory
URI http://hdl.handle.net/10072/35620
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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