My EMBA Journey

The US House of Representatives approved an economic stimulus package Tuesday worth an estimated 150 billion dollars potentially to avoid recession. Is this a right move?

From the knowledge I gained from macroeconomic studies, I started assessing the various tools Federal administrators can use in such a grim situation as a recession. Reduce the interest rate by working through the monetary policies. Government in turn can spur growth by spending more and giving more tax breaks. Key assumption is people will spend the money they receive as tax breaks or stimulus package checks.

In the following link Jason Furman, a advisor to President Clinton, and author-economist Steven E. Landsburg discuss the U.S. economy and the recently announced stimulus package.They look at how Keynesian theory of managing fiscal policy and monetary policy to prevent an economy from going in to recession.

I found a fantastic article on a total contradiction with Keynes Multiplier Theory. I am sure you will love this article as much as i did.