BdF paper looks at fiscal responses to liquidity traps

banque-de-france
The Banque de France

Fiscal policy-makers should consider raising investment in public infrastructure as a means of bringing about a post-pandemic recovery, a working paper published by the Banque de France argues.

In Fiscal stimulus in liquidity traps: conventional or unconventional policies? Matthieu Lemoine and Jesper Lindé analyse the relative effectiveness of sales tax increases and raising infrastructure effectiveness.

Economists have recently suggested both measures as possible responses to a liquidity trap

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