Colorado State University Fiscal Policy and Crowding out By Alejandro Reuss Summary

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Reference: Article Fiscal Policy and Crowding Out by Alejandro Reuss

This article discusses a fiscal stimulus, or in economics known as an expansionary fiscal policy and how it will affect the economy according to Keynes. Share your thoughts and discuss about how the process is taking place. You can take a look at some historical data (for this you’ll need to do some own Google searching!) and see whether this type of policies have been effective in the past; for instance, you can look at the New Deal era versus the Reagan era, versus the Obama era. In a more recent times, is Trump Administration’s fiscal policy working in conjunction with what the article says?

Think about crowding out as an “economic cost” of fiscal stimulus, and expand your thoughts about it. Does it make sense? How do we “see” this crowding out in real life? Go to Google / Khan Academy / YouTube websites to have a glimpse, and share your findings.