Understanding how the economy reacted to fiscal stimulus in the aftermath of the deepest recession of the last fifty years is essential. Joshua Aizenman of the University of California, Santa Cruz, and Gurnain Kaur Pasricha of the Santa Cruz Institute for International Economics and the Bank of Canada show that aggregate fiscal expenditure stimulus in the United States, properly adjusted for the declining fiscal expenditure of the fifty states, was close to zero in 2009.Economist's Voice
Government caused less distortion than expected.
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