THE USE OF THE FISCAL STIMULUS VS. BUDGET DEFICITS DURING A RECESSION

Strictly speaking, that is considering this from the point of the terminology used in economics, the fiscal stimulus is the action of a fiscal nature, undertaken whether by the means of lowering the taxes, increasing the amount of the government spending or of transfer payments in order to increase (generally speaking, alter) aggregate demand. We have underlined we are strictly speaking about what fiscal stimulus means, because this notion has multiple meanings but the one needed when arguing about the importance of the fiscal stimulus when dealing with a recession is stated above; furthermore, because the budget deficit enters the picture that is, the field of recession, fiscal stimulus and budget deficits, each one of these being closely connected with each other, the need of establishing what should one make out of terms such as fiscal stimulus is of a serious amplitude.