Fiscal policy is no free lunch

Published: 2019-06-11

KWC: s Lars Jonung and Fredrik NG Andersson had an article published in – CEPR’s policy portal.

They stress that the current push for fiscal activism is short-sighted. By looking at Swedish examples from the past 25 years, it shows that stable public finances combined with supply-side policies is the recipe for economic stability and growth.

Interest rates will not remain low forever and political populism should not be met by fiscal populism. The role of the economics profession is to bring out the connection between the short and the long run, a connection that is easy to forget in times of populism, low yields, and quick fixes.

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