US fiscal stimulus decreases output in rest of world – research

A helicopter drop policy could be the most effective co-ordinated effort

US Treasuries

US fiscal policy interventions, like those during the pandemic, decrease economic output in the rest of the world, say researchers with the Bank of Canada. Output decreases because of the increase in term premiums and long-term interest rates as portfolios are rebalanced.

US fiscal expansions are contractionary for the rest of the world on net, say authors Sami Alpanda, Uluc Aysun and Serdar Kabaca in an article published on November 1. “US fiscal expansions are contractionary abroad,” they

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account