Output spillovers from fiscal policy

Alan J Auerbach, Yuriy Gorodnichenko 10 December 2012

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Policymakers seeking to stabilise the economy face many challenges. A recent set of challenges is shocks from abroad. Such shocks can come from many directions: trade channels as during the Great Trade Collapse of 2009; financial linkages as during the 2008 Global Crisis; and capital flows (Crucini et al. 2008). Foreign fiscal policy is one shock that has been especially prominent during the Eurozone crisis and the US fiscal cliff discussion.

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Topics:  Europe's nations and regions

Tags:  fiscal stimulus, Greece, Eurozone crisis, fiscal spillovers

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