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Monday, December 29, 2008

WILL FISCAL STIMULI HELP OFFSET THE RECESSION OR NOT? AN ONGOING SERIES

Today's Buggy Topic

It's found at the Marginal Revolution, where once more prof bug defends a moderate Keynesian view about the utililty of both monetary and fiscal stimuli to offset what is emerging as the longest recession in the US since WWII . . . although not the deepest so far.  That honor goes to the 1981-82 recession, when unemployment rose to double figures . . . a level that hadn't existed until then since 1940 and not rivaled since, though who can say what it could be without proper countercyclical monetary and fiscal policies?

No need to say more by way of introduction.  Click here for the buggy posts, two of them; and as usual, fairly long with some hard-headed evidence.