Friday, August 26, 2011

The Need for Additional Fiscal Stimulus

As Fed Chairman Ben Bernanke made clear today in his Jackson Hole speech, policy makers beyond the Fed need to actively participate in stimulating aggregate demand in the economy (i.e., Congress and the White House need to do their fair share with respect to fiscal policy stimulus.)  Nobel Prize-winning economist Peter Diamond comments on the need for additional fiscal stimulus, especially in the form of infrastructure investment, to help grow the US economy and reduce unemployment.