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The effect of the rescue plans and the need for policies to increase economic growth

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  • Taylor, John B.

Abstract

This paper evaluates the economic impact of discretionary fiscal and monetary actions taken in the United States during 2020 and 2021. The fiscal actions are The Coronavirus Aid, Relief, and Economic Security Act, or the “CARES” Act, passed in March 2020; The Consolidated Appropriations Act, passed in December 2020; and The American Rescue Plan Act, passed in March 2021. The paper focuses on the impact of the “economic impact payments” that underlie these fiscal actions. The paper also examines discretionary monetary policy actions taken during the same period. The overall implication is that there is a need to return to policies that increase economic growth and stability, including rules-based fiscal and monetary policy, rather than to continue with these one-time discretionary actions.

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  • Taylor, John B., 2022. "The effect of the rescue plans and the need for policies to increase economic growth," Journal of Policy Modeling, Elsevier, vol. 44(4), pages 768-779.
    • Handle: RePEc:eee:jpolmo:v:44:y:2022:i:4:p:768-779
    DOI: 10.1016/j.jpolmod.2022.09.004
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    References listed on IDEAS

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    1. Gramlich, Edward M, 1979. "Stimulating the Macro Economy through State and Local Governments," American Economic Review, American Economic Association, vol. 69(2), pages 180-185, May.
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    8. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
    9. John B. Taylor, 2000. "Reassessing Discretionary Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 21-36, Summer.
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    Cited by:

    1. Bação, Pedro & Duarte, Joshua & Simões, Marta, 2024. "Social expenditure composition, inequality and growth in the OECD: Labour market policies are most effective," Journal of Policy Modeling, Elsevier, vol. 46(1), pages 75-89.
    2. Jack Dunbar & Christopher J. Kurz & Geng Li & Maria D. Tito, 2024. "In the Driver's Seat: Pandemic Fiscal Stimulus and Light Vehicles," Finance and Economics Discussion Series 2024-013, Board of Governors of the Federal Reserve System (U.S.).

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