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在线翻译:
szdaily -> World Economy
Fiscal stimulus in downturns is safe: researchers
    2017-August-28  08:53    Shenzhen Daily

GOVERNMENT spending in a recession can boost a country’s economy without permanently bloating its public debt, even if the debt is already quite large, researchers told an influential group of central bankers Saturday.

“Expansionary fiscal policies adopted when the economy is weak may not only stimulate output but also reduce debt-to-GDP ratios,” University of California, Berkeley, professors Alan Auerbach and Yuriy Gorodnichenko said in a paper presented at the Kansas City Federal Reserve’s annual economic symposium.

The symposium’s focus this year is on how best to foster a stronger global economy.

After the 2007-2009 global financial crisis, fear of ballooning public debt pushed fiscal authorities in some countries to ratchet back government spending, a tactic that economists now think may have slowed recovery.

But with debt levels high by historical standards in many countries, including the United States where debt is about 76 percent of the nation’s output, policymakers worry about the drag on growth.

The research presented Saturday offers new evidence that fiscal stimulus in a recession is not only safe but effective even in heavily indebted countries.

The University of California researchers warned in their paper that fiscal stimulus when an economy is strong can indeed add to debt burdens and slow long-run growth.

“Our results should not be interpreted as an unconditional call for an aggressive government spending in response to a deteriorating economy,” they wrote.

Still, they argued, the evidence suggests that fiscal spending during a downturn has less risk of downside than is often thought.(SD-Agencies)

 

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