VANCOUVER—New government spending in response to the recession will likely have little effect on economic growth—yet will produce more government debt, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“In the coming months, as governments contemplate trying to kickstart the economy with more spending, they should recognize that evidence indicates this approach is ineffective and results in more government debt,” said Jake Fuss, Fraser Institute economist and co-author of Is Fiscal Stimulus an Effective Policy Response to a Recession?
