IDEAS home Printed from https://ideas.repec.org/p/pas/papers/2009-18.html
   My bibliography  Save this paper

Ambulance Economics: The Pros and Cons of Fiscal Stimuli

Author

Listed:
  • W. Max Corden

Abstract

This lecture deals not with the causes of the world financial crisis nor how to forecast or avoid one in the future, nor how to revive the financial sector, but rather with the crucial emergency "ambulance" policy of fiscal stimulus. What are the main effects of stimuli policies, and, in particular, the post-crisis effects? What are the main decisions to make and practical problems involved? What difference does a preexisting public debt problem make? Seven arguments against fiscal stimuli will be examined. Finally, fundamental ideological issues, namely government failure versus market failure, and fear of inflation versus fear of depression, will be noted.

Suggested Citation

  • W. Max Corden, 2009. "Ambulance Economics: The Pros and Cons of Fiscal Stimuli," Departmental Working Papers 2009-18, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2009-18
    as

    Download full text from publisher

    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2009/wp_econ_2009_18.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Antonio Spilimbergo & Steve Symansky & Olivier Blanchard & Carlo Cottarelli, 2009. "Fiscal Policy For The Crisis," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(02), pages 26-32, July.
    2. Corden, W. Max, 1995. "Economic Policy, Exchange Rates, and the International System," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226115917.
    3. W. Max Corden, 2010. "The theory of the fiscal stimulus: how will a debt-financed stimulus affect the future?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 26(1), pages 38-47, Spring.
    4. repec:bla:ecorec:v:55:y:1979:i:148:p:1-19 is not listed on IDEAS
    5. W. M. Corden, 1979. "Wages and Unemployment in Australia," The Economic Record, The Economic Society of Australia, vol. 55(1), pages 1-19, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abdurohman & Budy P. Resosudarmo, 2017. "The Behavior Of Fiscal Policy In Indonesia In Response To Economic Cycles," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(02), pages 377-401, June.
    2. Marcella Alifia Kuswana Putri & Chandra Utama & Ivantia Savitri Mokoginta, 2022. "The Impact Of Fiscal Space On Indonesia’S Fiscal Behavior," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 25(2), pages 235-256, August.
    3. Budy P. Resosudarmo & Abdurohman & Arief A. Yusuf & Djoni Hartono, 2021. "Spatial impacts of fiscal stimulus policies during the 2009 global financial crisis in Indonesia," Asia-Pacific Journal of Regional Science, Springer, vol. 5(1), pages 305-326, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard H. Snape, 1996. "Distinguished Fellow of the Economic Society of Australia, 1995: Professor Max Corden," The Economic Record, The Economic Society of Australia, vol. 72(216), pages 1-6, March.
    2. Arslan Razmi, 2021. "Capital inflows, sustained investment surges and the role of external economies of scale in a developing economy," Metroeconomica, Wiley Blackwell, vol. 72(2), pages 365-387, May.
    3. P. D. Jonson, 1979. "The State of Australian Economics: Stabilization and Industry Policies: A review article stimulated by F. H. Gruen (ed.), Surveys of Australian Economics, Volume 1," The Economic Record, The Economic Society of Australia, vol. 55(4), pages 297-305, December.
    4. Brittle, Shane, 2009. "Ricardian Equivalence and the Efficacy of Fiscal Policy in Australia," Economics Working Papers wp09-10, School of Economics, University of Wollongong, NSW, Australia.
    5. Steinherr, Alfred & Cisotta, Alessandro & Klar, Erik & Sehovic, Kenan, 2006. "Liberalizing Cross-Border Capital Flows: How Effective Are Institutional Arrangements against Crisis in Southeast Asia," Working Papers on Regional Economic Integration 6, Asian Development Bank.
    6. Ian McDonald & Jenny Lye, 2006. "Union Power and Australia’s inflation Barrier, 1965:4 to 2004:3," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 9(3), pages 287-304, September.
    7. Jérôme Creel & Eric Heyer & Mathieu Plane, 2011. "Petit précis de politique budgétaire par tous les temps," Post-Print hal-03460510, HAL.
    8. Jeffrey A. Frankel & Shang-Jin Wei, 2004. "Managing Macroeconomic Crises," NBER Working Papers 10907, National Bureau of Economic Research, Inc.
    9. Prema-chandra Athukorala, 2024. "The Sovereign Debt Crisis in Sri Lanka: Anatomy and Policy Options," Asian Economic Papers, MIT Press, vol. 23(2), pages 1-28, Summer.
    10. Marc Audi & Amjad Ali, 2023. "Public Policy and Economic Misery Nexus: A Comparative Analysis of Developed and Developing World," International Journal of Economics and Financial Issues, Econjournals, vol. 13(3), pages 56-73, May.
    11. Luca Agnello & Davide Furceri & Ricardo M. Sousa, 2011. "Fiscal Policy Discretion, Private Spending, and Crisis Episodes," NIPE Working Papers 31/2011, NIPE - Universidade do Minho.
    12. Ghosh, Sunandan & Kundu, Srikanta, 2019. "Central Bank Intervention in Foreign Exchange Market under Managed Float: A Three Regime Threshold VAR Analysis of Indian Rupee-US Dollar Exchange Rate," MPRA Paper 93466, University Library of Munich, Germany.
    13. Pastor Jr., Manuel & Wise, Carol, 1999. "Stabilization and its Discontents: Argentina's Economic Restructuring in the 1990s," World Development, Elsevier, vol. 27(3), pages 477-503, March.
    14. Moumita Basu & Rilina Basu & Ranjanendra Narayan Nag, 2022. "A Dependent Economy Model of Employment, Real Exchange Rate and Debt Dynamics: Towards an Understanding of Pandemic Crisis," Foreign Trade Review, , vol. 57(1), pages 85-113, February.
    15. Wilfried Rickels & Linda Kleemann & Gernot Klepper & Sonja Peterson & Sebastian Petrick, 2010. "Konjunktur für den Klimaschutz? Klima- und Wachstumswirkung weltweiter Konjunkturprogramme," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 65(2), pages 129-166, June.
    16. Juan Carlos Moreno-Brid, 1998. "On Capital Flows and The Balance-of-Payments-Constrained Growth Model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 21(2), pages 283-298, December.
    17. Mariarosaria Comunale, 2015. "Current Account and Reer Misalignments in Central Eastern EU Countries: an Update Using the Macroeconomic Balance Approach," Bank of Lithuania Working Paper Series 20, Bank of Lithuania.
    18. Robert A. Blecker, 1998. "International Competitiveness, Relative Wages, and the Balance-Of-Payments Constraint," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 20(4), pages 495-526, July.
    19. Hernán Rincón, 1999. "Testing the Short-Long-Run Exchange Rate Effects on Trade Balance: The Case of Colombia," Borradores de Economia 120, Banco de la Republica de Colombia.
    20. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h61k5ih10 is not listed on IDEAS
    21. Zeyneb GUELLIL & Fatima Zohra MAROUF & Mohammed Benbouziane, 2017. "Exchange Rate Regimes and Economic Growth in Developing Countries: An Empirical Study Using Panel Data from 1980 to 2013," MIC 2017: Managing the Global Economy; Proceedings of the Joint International Conference, Monastier di Treviso, Italy, 24–27 May 2017,, University of Primorska Press.

    More about this item

    Keywords

    financial crisis; depression; fiscal policy; Keynes;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pas:papers:2009-18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Prema-chandra Athukorala (email available below). General contact details of provider: https://edirc.repec.org/data/asanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.