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Testimony

If, When, How: A Primer on Fiscal Stimulus

Douglas W. Elmendorf, Jason Furman
January 17, 2008
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Abstract

Economists believe that monetary policy should play the lead role in stabilizing the economy because of the Federal Reserve's ability to act quickly and effectively to adjust interest rates, using its technical expertise and political insulation to balance competing priorities. Fiscal policy can also help stabilize the economy. This paper examines the conditions under which fiscal stimulus is appropriate and analyzes three principles of fiscal stimulus, that fiscal stimulus should be timely, targeted, and temporary. Elmendorf and Furman evaluate potential options for fiscal stimulus using these criteria and conclude with a discussion on the importance of improving risk protection for families.

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Meet the Experts

  • Douglas W. Elmendorf
  • Jason Furman
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
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