Journal Article

Measuring Fiscal Impetus: The Great Recession in Historical Context


Abstract: The authors use a measure of fiscal impetus to examine how fiscal policy has behaved during business cycles in the past, how it responded to the most recent recession, and how it is likely to evolve over the next several years. They find that policy was more expansionary than average during the 2007 recession and has been significantly more contractionary than average during the recovery. By the end of 2012, fiscal impetus was below its historical business-cycle average and it is forecast to remain depressed well into the future.

Keywords: Fiscal policy; Great recession;

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Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Economic Perspectives

Publication Date: 2014

Issue: Q III