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Will without War?

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  • Klinedinst, Mark

Abstract

While congress debates the merits of a stimulus package of around 900 hundred billion dollars, a historical approach to the current situation suggests that the stimulus packages currently being discussed are actually far less generous than may be needed. The Congressional Budget Office projects that we are in “a recession that will probably be the longest and the deepest since World War II.” It is often suggested that the massive spending necessitated by the nation’s involvement in World War II helped end the Great Depression. Without a comparably ambitious unifying cause, however, I am afraid that the spending required to pull us out of a decline will be considered politically unpalatable, leading to an inadequate response to the crisis. An examination of spending patterns during the nineteen-­‐thirties and nineteen-­‐forties and their application to the current scenario suggest the true extent of the stimulus that may be needed.

Suggested Citation

  • Klinedinst, Mark, 2009. "Will without War?," MPRA Paper 26293, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:26293
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    File URL: https://mpra.ub.uni-muenchen.de/26293/1/MPRA_paper_26293.pdf
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "The Aftermath of Financial Crises," American Economic Review, American Economic Association, pages 466-472.
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    More about this item

    Keywords

    stimulus; Keynesian; depression; Okun's Law; unemployment;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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