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Did Australia's Fiscal Stimulus Counter Recession?: Evidence from the National Accounts

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  • Anthony J. Makin

Abstract

A close scrutiny of the pattern of aggregate expenditure recorded in the Australian national accounts reveals it was the behaviour of exports and imports, and not increased fiscal activity, that was primarily responsible for offsetting the fall in private investment due to the Global Financial Crisis. The examination of a broad set of national income and employment indicators suggests that the Australian economy most likely did not avoid a recession, even though it was a relatively mild one by past standards.

Suggested Citation

  • Anthony J. Makin, 2010. "Did Australia's Fiscal Stimulus Counter Recession?: Evidence from the National Accounts," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 17(2), pages 5-16.
    • Handle: RePEc:acb:agenda:v:17:y:2010:i:2:p:5-16
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    File URL: http://press-files.anu.edu.au/downloads/press/p89361/pdf/fiscal_stimulus.pdf
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    References listed on IDEAS

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    1. Anthony J. Makin, 2010. "How Should Macroeconomic Policy Respond to Foreign Financial Crises?," Economic Papers, The Economic Society of Australia, vol. 29(2), pages 99-108, June.
    2. Sven Jari Stehn & Mr. Daniel Leigh, 2009. "Fiscal and Monetary Policy During Downturns: Evidence From the G7," IMF Working Papers 2009/050, International Monetary Fund.
    3. Lane, Philip R., 2003. "The cyclical behaviour of fiscal policy: evidence from the OECD," Journal of Public Economics, Elsevier, vol. 87(12), pages 2661-2675, December.
    4. Jordi Gali & Roberto Perotti, 2003. "Fiscal Policy and Monetary Integration in Europe," NBER Working Papers 9773, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Bruno Martorano, 2015. "Lessons from the recent economic crisis: the Australian household stimulus package," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 309-327, May.
    2. Makin, Anthony J., 2019. "Lessons for macroeconomic policy from the Global Financial Crisis," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 13-25.
    3. Makin, Anthony J. & Layton, Allan, 2021. "The global fiscal response to COVID-19: Risks and repercussions," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 340-349.
    4. Shuyun May Li & Adam Hal Spencer, 2016. "Effectiveness of the Australian Fiscal Stimulus Package: A DSGE Analysis," The Economic Record, The Economic Society of Australia, vol. 92(296), pages 94-120, March.
    5. Nicolaas Groenewold, 2017. "China’s ‘New Normal’: How will China’s growth slowdown affect Australia’s growth?," Economics Discussion / Working Papers 17-19, The University of Western Australia, Department of Economics.
    6. Carmignani, Fabrizio, 2022. "The electoral fiscal multiplier," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 938-945.
    7. Charlton, Andrew, 2019. "Fiscal policy in extraordinary times: A perspective from Australia’s experience in the global recession," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 83-90.
    8. Groenewold, Nicolaas, 2018. "Australia saved from the financial crisis by policy or by exports?," Journal of Policy Modeling, Elsevier, vol. 40(1), pages 118-135.
    9. Day, Creina, 2019. "House prices post-GFC: More household debt for longer," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 91-102.
    10. Creina Day, 2011. "China's Fiscal Stimulus and the Recession Australia Never Had: Is a Growth Slowdown Now Inevitable?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 18(1), pages 23-34.
    11. Nicolaas Groenewold, 2012. "Australia and the GFC: Saved by Astute Fiscal Policy?," Economics Discussion / Working Papers 12-28, The University of Western Australia, Department of Economics.
    12. Ross Guest & Anthony J. Makin, 2011. "In the Long Run, the Multiplier is Dead: Lessons from a Simulation," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 18(1), pages 13-22.
    13. Nicolaas Groenewold, 2018. "China's ‘New Normal’: How will China's Growth Slowdown Affect Australia's Growth?," Australian Economic Papers, Wiley Blackwell, vol. 57(4), pages 435-445, December.

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