Exact(1)
It's stimulative for an economy that has recession written in capital letters.
Similar(56)
In a recent post, my colleague Casey Mulligan, who has been a critic of federal stimulus spending, made an important point about that spending – whether it is stimulative or not depends vitally on its composition.
"Will it be stimulative?" Mr. McKelvey said.
The government's addition to ongoing spending would raise inflation, however; it would be stimulative because there would be even more money chasing a given set of real resources.
"It may be long before the tolls become remunerative, but its immediate effect on commerce will be stimulative," it said.
In the short run, tax cuts, like President John F. Kennedy's in the 1960's, can be stimulative.
Additional inflation would also be stimulative thanks to its effect on the nation's current account, via the exchange rate.
Monetary authorities could engineer a similar recovery today by committing to a 5% rate of nominal GDP growth, which implies inflation of 2% or more.And Greg Mankiw has pointed out that a commitment to higher inflation would encourage households and businesses to spend money now, which would be stimulative, rather than hoard it.
"The old idea that deficits are stimulative was good economics in the 1930's and probably in the 1960's," he said, but not in today's world, where "interest rates are largely determined by the long-term bond market".
A majority -- 57% -- described the central bank's monetary policy as "about right," while 37% said it was "too stimulative".
The economic impact is likely to be stimulative.
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