in the keynesian respect
Posted on: April 14, 2012 at 19:51:39 CT
Gadfly MU
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you use fiscal and monetary policy countercyclically
to stimulate economic growth, alleviate unemployment and curb inflation
by increasing fiscal spending when growth is needed and unemployment is high
and increasing interest rates to curb inflation, when it is high
countercyclically
so if we used fiscal stimulus and low interest rates now
to increase growth and alleviate unemployment
we would in the future increase interest rates and decrease spending
after we achieved low unemployment and good growth
countercycically
to curb inflation and slow growth
so that we prevent asset bubbles
Edited by Gadfly at 19:52:45 on 04/14/12