Arbeitspapier

Reorienting fiscal policy after the great recession

The paper evaluates the fiscal policy initiatives during the Great Recession in the United States. It argues that, although the nonconventional fiscal policies targeted at the financial sector dwarfed the conventional countercyclical stabilization efforts directed toward the real sector, the relatively disappointing impact on employment was a result of misdirected funding priorities combined with an exclusive and ill-advised focus on the output gap rather than on the employment gap. The paper argues further that conventional pump-priming policies are incapable of closing this employment gap. In order to tackle the formidable labor market challenges observed in the United States over the last few decades, policy could benefit from a fundamental reorientation away from trickle-down Keynesianism and toward what is termed here a bottom-up approach to fiscal policy. This approach also reconsiders the nature of countercyclical government stabilizers.

Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 719

Classification
Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Aggregate Factor Income Distribution
Policy Objectives; Policy Designs and Consistency; Policy Coordination
Fiscal Policy
Studies of Particular Policy Episodes
Particular Labor Markets: Public Policy
Subject
Fiscal Policy
American Recovery and Reinvestment Act of 2009
Trickle-Down Keynesianism
Countercyclical Employment Policy

Event
Geistige Schöpfung
(who)
Tcherneva, Pavlina R.
Event
Veröffentlichung
(who)
Levy Economics Institute of Bard College
(where)
Annandale-on-Hudson, NY
(when)
2012

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Tcherneva, Pavlina R.
  • Levy Economics Institute of Bard College

Time of origin

  • 2012

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