IMF reduces forecast for U.S. growth The IMF expects U.S. economic growth to slow to 2% i
IMF reduces forecast for U.S. growth
The IMF expects U.S. economic growth to slow to 2% in 2012 and 2.25% in 2013. That’s down from its earlier estimates of 2.15% in 2012 and 2.4% in 2013. Christine Lagarde, the IMF’s managing director, said that Congress should “promptly” raise the debt ceiling and adopt strong fiscal policies.
Source: The New York Times, July 3, 2012
Explain the effects of strong fiscal stimulus if it is implemented well.
9.The Canadian Prime Minister Stephen Harper warned on November 6, 2008, that if policy makers adopt too strong a fiscal stimulus then long-term growth might be jeopardized. Explain what he meant.
10.Read Eye on Fiscal Stimulus on p. 415. How big was the fiscal stimulus package of 2008–2009, how many jobs was it expected to create, and how large was the multiplier implied by that expectation? Did the stimulus work?