stimulus

Examples of stimulus in the following topics:

• Evaluating the Recent United States Stimulus Package

  • The American Recovery and Reinvestment Act of 2009 (ARRA), otherwise known as the Stimulus or The Recovery Act, was an economic stimulus package was signed into law on February 17, 2009.
  • The primary justification for the stimulus package was to minimize unemployment.
  • One year after the stimulus, several independent firms, including Moody's and IHS Global Insight, estimated that the stimulus saved or created 1.6 to 1.8 million jobs and forecast a total impact of 2.5 million jobs saved by the time the stimulus is completed.
  • Since the stimulus only is impactful when the money is actually spent, delays could have reduced the overall effectiveness of the stimulus.
  • Summarize the effects of the use of stimulus in the wake of the Great Recession

• Arguments For and Against Fighting Recession with Expansionary Fiscal Policy

  • Due to the funding process of expansionary policy, there is a lack of consensus among economists with respect to the merits of fiscal stimulus.
  • This may in turn reduce aggregate demand for goods and services, which defeats the purpose of a fiscal stimulus.
  • Fiscal stimulus is implemented with the view that tax relief through a reduction in tax rate and or direct government spending through investment (infrastructure, repair, construction) will provide stimulus to increase economic growth by directly influencing consumption or the government expenditure component of GDP .

• Crowding-Out Effect

  • ., via stimulus programs) could create competition with the private sector for scarce funds available for investment, resulting in an increase in interest rates and reduced private investment or consumption.
  • Therefore, the effect of the stimulus is offset by the effect of crowding out.

• Recovery

  • The objective of economic recovery when in crisis is to stabilize the economy and recapture the value lost using economic stimulus strategies.
  • The objective of economic recovery when in crisis is to stabilize the economy, and from there recapture the value lost through economic stimulus strategies while addressing the factors which contributed to the collapse in the first place.
  • The stimulus package can be broken down via the attached figure in regards to monetary investment in specific places , totaling $831 billion (USD) between 2009 and 2019.

• Long-Run Implications of Fiscal Policy

  • This causes a lower aggregate demand for goods and services, contrary to the objective of a fiscal stimulus.
  • Other possible problems with fiscal stimulus include inflationary effects driven by increased demand.
  • Similarly, if stimulus capital is invested in creating jobs, the overall spending in a given economy will increase (that is, if jobs are actually created).

• Objectives

  • Hunger is a physiological stimulus so it is easy to recognize the incongruity between being hungry and not being hungry.

• Definition of Price Elasticity of Supply

  • If cost rise rapidly the stimulus to production will be choked off quickly.

• Keynesian Theory

  • Overcoming an economic depression requires economic stimulus, which could be achieved by cutting interest rates and increasing the level of government investment.

• The Federal Reserve and the Financial Crisis of 2008

  • However, following the crisis, the U.S. experienced very low levels of inflation, and cutting the federal funds rate failed to provide enough economic stimulus to get the country out of the recession.

• Bernanke Era

  • Throughout his time as chairman, Bernanke has influenced the financial crisis, the Wall Street bailout, and the economic stimulus.