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Anticipated stimulus policies enacted perhaps in response to a crisis can motivate precautionary behaviour during the … preceding expansion. Ex post stimulus can be ex ante prudential. Prudential fiscal stimulus both speeds up economic recoveries …, and prevents crises from occurring in the first place. Prudential fiscal stimulus policies can be simple: a wage subsidy …
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generate optimal policies that resemble "austerity" measures. Optimal policy prescribes front-loaded fiscal consolidations and …
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