Additionally, raising interest rates would be a form of expansionary fiscal policy.

Its fiscal policy has been expansionary, but nowhere near the level of the US.

Moreover, Brazilian fiscal policy is likely to switch from restrictive to neutral or slightly expansionary this year.

Expansionary monetary policy is expected to inject liquidity into the Japanese economy until inflation hits the Bank of Japan s 2 target, while expansionary fiscal policy is expected to continue until economic recovery takes hold.

So early fiscal consolidation can be expansionary on balance.

The early 2012 upturn in US economic activity still owes a lot to extraordinarily expansionary monetary policy and unsustainable fiscal deficits.

Europe is mired in its oxymoronic commitment to expansionary fiscal austerity.

That policy, almost instantly dubbed Abenomics, comprises what have been called the three arrows bold monetary policy, an expansionary fiscal stance, and structural reforms to stimulate private investment.

With the government still having room to wield expansionary monetary and or fiscal policy, the economic revival was only a matter of time.

Even if this does not trigger a crisis, it sharply narrows the government s scope for using expansionary fiscal policy to stimulate the economy.

Of course, no real world policy falls cleanly into any one of these ideal types. Right now, the European Central Bank worries that continued expansionary fiscal policy will backfire.

Expansionary monetary policy in such an environment might fail.

That, plus the gloomy international outlook and a fiscal policy that will have to become less expansionary after the election, will slow the economy down.

Moreover, the critics object, the evidence in support of expansionary fiscal consolidations is flawed.

This assertiveness has been on full display under Prime Minister Shinzo Abe, who has vowed to attack Japan s prolonged economic morass using three arrows expansionary monetary policy, aggressive fiscal policy, and structural reform.

BEIJING China s Central Economic Work Meeting, comprising top government decision makers, recently chose to continue the expansionary fiscal and monetary policy launched in the last quarter of 2008.

Fiscal policy was required.

In each case where fiscal consolidation supposedly was expansionary, the economy grew because of some third factor.

Unfortunately, its main impact at this point is to distract attention from measures that would truly stimulate growth, including an expansionary fiscal policy and financial sector reforms that boost lending.

After the global financial crisis erupted in the last quarter of 2008, interest rates in Brazil fell sharply, credit expanded quickly, and fiscal policy shifted from neutral to strongly expansionary.

Call them fiscal policy, credit policy, monetary policy, and inflation.

In The General Theory of Employment, Interest, and Money, Keynes sought to provide the missing rationale for relying on expansionary fiscal policy to steer advanced capitalist economies out of the Great Depression.

A Future Oriented US Fiscal Policy

Fiscal policy was left as the only countercyclical policy option.

To offset the negative impact of private sector deleveraging on growth, the US government has maintained expansionary fiscal and monetary policies.

In particular, expansionary monetary and fiscal policies which are helpful in the short term must be accompanied by fundamental structural reforms.

A Balance Sheet Approach to Fiscal Policy

The Fiscal Cliff and US Foreign Policy

Using fiscal policy to encourage job creation

Some will say that he should get G 20 countries to coordinate an orderly exit from their expansionary monetary and fiscal policies.

A comparable debate is raging over fiscal policy.

Additionally, raising interest rates would be a form of expansionary fiscal policy. This is because Japan has a large public debt, and increasing interest payments on that debt would put extra money in the hands of households.

We know the consequences McCain s fiscal policy is likely to be standard Republican fiscal policy and since 1981, standard Republican fiscal policy has increased the ratio of gross federal debt to GDP by nearly 2 per year.

As a result of a recklessly expansionary American policy, they argued, they were being flooded with imported finance.

Accelerating wage growth implies that the economy is now at a point at which increases in demand created by easier monetary policy or expansionary fiscal policy would not achieve a sustained rise in output and employment. Instead, this demand would be channeled into higher wages and prices.

What is needed are constraints on fiscal policy by each country, not a supranational fiscal authority.

This brings us to the fourth tool fiscal policy.

Indeed, just a year or two ago, expansionary fiscal contraction was all the rage, and a massive research effort went into proving its existence.

Some argue that fiscal consolidation by gradual permanent reductions in spending would be expansionary for high debt countries, as occurred in some historical episodes.

Osborne s defenders might make the same argument for his fiscal policy. A credible policy of fiscal consolidation, they might say, will have the same exhilarating effect on confidence as fiscal consolidation itself.

At this point, policy becomes expansionary again, and the cycle begins anew led by investment growth, the economy rebounds.

Thus, the acceleration of economic growth since the third quarter of 2012 should come as no surprise. With the government still having room to wield expansionary monetary and or fiscal policy, the economic revival was only a matter of time.

If so, then the unavoidable conclusion must be that things would not have been so bad if the government had refused to implement an expansionary fiscal policy, recapitalize banks, nationalize troubled institutions, and buy financial assets in non standard ways.

Then the Bush administration s reckless fiscal policy pushed it lower.

Given dysfunctional US fiscal policy, the dollar s resilience is surprising.