The limits of fiscal policy
Acton Institute Powerblog

The limits of fiscal policy

Note: This is post #126 in a weekly video series on basic economics.

The best case for fiscal policy happens during a recession caused by an aggregate demand shock, says economist Alex Tabarrok. Even so, it’s hard to get it right because the U.S. economy is massive and complex.

In this video by Marginal Revolution University, Tabarrok highlights the three factors for an ideal stimulus—Timely, Targeted, and Temporary—and notes that all of these characteristics present some problems for enacting fiscal policy.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Click here to see other videos in the Introduction to Economics series.

Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).