Hamish McRae on the Fiscal Stimulus debate

Hamish wrote this piece at the back end of last week - but it is certainly relevant to many aspects of macro-management policies for AS and A2 students. How big should a fiscal stimulus be during a recession? The fiscal positions of European countries - be they inside or outside of the Euro Area are very different as are the attitudes of national governments to the desirability or otherwise of using fiscal policy to actively stimulate demand, output and jobs.

Hamish writes

“There are two issues here. One is about the size of the boost. The other is whether the annual running deficit is more of a concern than the absolute level of national debt.”

It strikes me that this article would be a good one to read for students who are preparing for the OCR 2888 January 2009 paper. Our new toolkit for this paper is now available for immediate dispatch.