The authors examine how the speed, size, and structure of fiscal stimulus shaped economic recoveries during the pandemic. Their central takeaway is that direct household support produced stronger outcomes, while slower responses left economies weaker. The US delivered a 6.5% fiscal growth impact.
Fiscal Stimulus Matters More Than Ever: Is It Falling Short?
Bridgewater
Kevin Brennan, Larry Cofsky
Article
1 Pages
Key Takeaways
US Stimulus Impact: US fiscal support contributed an estimated 6.5% to growth, leaving GDP 3.0% below 2019 levels versus 7.5% in Europe.
Household Transfers Worked: Canadian household incomes rose 10% in the second quarter as direct transfers helped offset lost private sector income and supported economic activity.
UK Support Lagged: UK GDP fell more than 20%, while fiscal programs were estimated to add roughly 4% to GDP amid still depressed economic conditions.
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