Journal Article

Fiscal headwinds: Is the other shoe about to drop?


Abstract: Federal fiscal policy during the recession was abnormally expansionary by historical standards. However, over the past 2 years it has become unusually contractionary as a result of several deficit reduction measures passed by Congress. During the next three years, we estimate that federal budgetary policy could restrain economic growth by as much as 1 percentage point annually beyond the normal fiscal drag that occurs during recoveries.

Keywords: Fiscal policy - United States;

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Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: FRBSF Economic Letter

Publication Date: 2013

Order Number: 16