ABSTRACT
This chapter re-examines the possible role of fiscal demand-side stabilisation on consumer confidence and real macreoeconomic growth. We extend the theoretical framework of Chapter 8 to include policies resembling the ill-fated ‘jump-start’ policies planned by the Clinton administration in early 1993 to revive GDP and employment in the United States. These proposed policies, that were essentially large fiscal ‘infrastructure’ outlays on mass transit, telecommunications, education and the environment, were preempted by (i) stronger-than-expected US economic growth in the first quarter of 1993, and (ii) a renewed government and public focus on shrinking the federal budget deficits by trimming government spending.
