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Fiscal and Monetary policy – limited by a lack of ‘wriggle room’?
Tom White
15th June 2015
At some point recession will return, and we will want to use fiscal policy and monetary policy to help revive aggregate demand. After the financial crisis, policymakers sprang into action to stimulate the economy. As a result the recession, though bad, was far less severe than it might have been. However, according to The Economist, that quick and dramatic response nearly exhausted governments’ economic firepower. There’s a distinct lack of ‘wriggle room’ for next time around…
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