Byron Gangnes
University of Hawai‘i at Manoa
Abstract
Recovery has begun in the global economy and is either underway or imminent in the US. The US recovery is likely to be anemic by historical standards, raising the possibility that additional stimulus may be desirable. There has been some talk of a second round of Federal fiscal stimulus, and the Federal Reserve has demonstrated that it has a flexible toolkit for providing additional liquidity. The possible need for such stimulus will come up against the reality of an expanding public debt on the one hand, and inflationary concerns on the other. In this paper, I review prospects for US recovery, and I use simulations of the IHS Global Insight Model to assess the potential impact on the recovery path of alternative macro policies.