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View: Judge an expansionary fiscal policy by how quickly it props up the economy

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Instead, should countercyclical fiscal policy become part of our policy lexicon to be used judiciously, but unapologetically? The clamour for fiscal stimulus is, incidentally, not a product of the Covid pandemic.

Synopsis

​​Thus, it might be prudent to go the extra mile to consolidate debt when the economy is booming. A way to formalise this would be to target an average fiscal deficit ratio over a period, instead of defining a linear glide path.

A senior economist of the government was recently reported to have told a group of industrialists that asset creation, and not fiscal stimulus, was the budget’s aim. This somewhat curious interpretation of what at first glance appears to be textbook fiscal stimulus, reflects a mindset common among our policymakers for many years now. This often compels them to be somewhat apologetic about fiscal expansion, choosing to couch these efforts in less

BY

Abheek Barua

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