In the Wake of the Great Recession: Long-Term Effects of Fiscal Policy Essay

In the Wake of the Great Recession: Long-Term Effects of Fiscal Policy Essay

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Since the mid-1900s, the United States (U.S.) has experienced ten noteworthy recessions (BLS, 2012). The recession in the most-recent memory has been coined the Great Recession, and it officially lasted from the end of 2007 through the middle of 2009 (BLS, 2012; Economic Policy Institute, n.d.). Keynesian supporters promote government intervention when economic conditions weaken in order to reestablish consumer confidence, encourage spending, and promote economic growth (Gaber, Gruevski, & Gaber, 2013). At large, at the various levels of government within the U.S., Keynesian economics are utilized in response to economic declines (Gaber et al., 2013).
Fiscal policies aimed at economic expansion can come at a great cost to taxpayers, but a lack of response may as well. In an effort to establish the effectiveness of fiscal policies implemented following the Great Recession, the long-term economic impacts of such policies have been evaluated. This paper provides the framework for establishing the appropriate fiscal policy response to economic recessions in the future. The remainder of the paper is structured as follows. Background information relative to the Great Recession will be followed by a reflection on the pertinent extant literature evaluating fiscal policy measure success. Once an understanding of the issues to be evaluated is known, the problem, purpose, and significance of the study will be discussed. Finally, a detailed discussion on the approach to, and findings of, the study is included.
Generally, a recession is an economic decline or a decrease in activity in the economy (BLS, 2012). The recession at the forefront of Americans’ minds is the Great Recession which has been noted to be the lengthiest “since ...


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...529. Retrieved from
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Ojede, A., & Yamarik, S. (2012). Tax policy and state economic growth: The long-run and short-run of it. Economic Letters, 116(2), 161-165.
http://dx.doi.org/10.1016/j.econlet.2012.02.023

Pollock, A. J. (2011). Boom and bust: Financial cycles and human prosperity. Washington, DC: AEI Press.

Recovery.gov. (n.d.). The American Recovery and Reinvestment Act. Retrieved from http://www.recovery.gov/arra/Pages/default.aspx

U.S. Bureau of Labor Statistics (BLS). (n.d.). Local area unemployment statistics: Current unemployment rates for states and historical highs/lows. Retrieved April 20, 2014, from http://www.bls.gov/web/laus/lauhsthl.htm

U.S. Bureau of Labor Statistics (BLS). (2012). The recession of 2007–2009. Retrieved from http://www.bls.gov/spotlight/2012/recession/

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