In any event, the evidence is that consumption smoothing does not neutralise the stimulus effect of tax cuts.
The rise in borrowing costs could have a negative effect on the economy rather than the positive stimulus effect the Fed anticipated.
According to the CBO's estimate--tallied before the stimulus funding took effect--this figure was expected to rise slightly from 50.5% in 2009 before settling at 50% in 2013.
" In fact, stimulus will be having an effect by keeping GDP "above the level it would be at in the absence of stimulus.
All of this stimulus had the eminently predictable effect of boosting domestic demand, driving economic growth, and lowering unemployment.
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If they are ordered to estimate the effect of the stimulus on GDP and jobs, they attach Keynesian multipliers to different spending categories.
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He now says that the government might do more beyond the fiscal stimulus set to take full effect in May, should conditions warrant.
So a decline of 2.2% in closings in May indicates demand for homes fell in April even while the home-buyer stimulus rebates were still in effect.
In order for stimulus spending to have a positive effect, our answer to (1) must be greater than our answers to (2), (3) and (4).
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News of his stimulus plans is already having that effect.
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So it has the double effect of being both socially relevant and also better stimulus.
In that case, a fiscal stimulus might be smoothed so much that it would have hardly any effect in the short term, when it is needed, but continue to boost spending later, when that may be the opposite of what is required.
The Fed has kept its easy money policy in effect, and yet the economic recovery stalled once other government stimulus programs expired in the spring.
"If Germany did not participate sufficiently in this stimulus, many other countries would also hesitate to do so and the effect would be disastrous for Europe, " he said.
That is especially true now, as the stimulus package enacted earlier this year this year makes billions of dollars available to effect long-overdue and much-needed upgrades in the U.S. grid.
The new stimulus measures used by the US and other governments would only bring long-lasting effect if the pointed micro and macro enhancements were processed too.
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One would expect public spending to have an even bigger initial stimulative effect than tax cuts (because in this case none of the initial stimulus is saved).
Fiscal stimulus packages that seemed sufficient two months ago may be too small, and too slow to take effect.
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While the Fed might have rescued the economy, the side effect of upwards pressure on commodity prices is making investors wary that an end to policy stimulus might arrive faster than they had otherwise thought.
In effect, he doesn't think MPs will be able to tell the difference between a targeted stimulus and a free-for-all.
Although both parties seem prepared to let the stimulus measures expire, neither party wants all the Bush tax cuts to end, or the sequester to take effect.
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