Anticipation of fiscal stimulus has ‘sizeable’ impact on growth – paper

strategy-growth

Private sector actors who anticipate government spending can generate a sizeable impact on output growth, a paper published by the Federal Reserve Bank of Chicago finds.

Jeffrey Campbell and co-authors examine the macroeconomic effects of the private sector anticipating fiscal stimulus following the Bipartisan Budget Act. The act became law in 2018 and raised the amount the US government could spend on fiscal measures in 2018 and 2019 by $300 billion.

They find a “sizeable and statistically

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