Fiscal Policies after 9/11

Paper Summary:

This paper examines the differences between monetary policies and fiscal policies and explains why it was thought that after September 11, fiscal policies were the only tools that could help regularize the markets and control the slowing economy. The paper looks at some of these policies which indirectly control the financial markets and also help in accelerating business activities in the country.

From the Paper:

"The two important fiscal measures are tax reduction and lower interest rates. When businesses stop producing adequate amount of goods and services, government encourages them by offering attractive incentives mostly in the form of lower interest rates. These rates make borrowing easier and induce producers to invest more in business to increase production level. However the important reason why producers stop producing during tough economic times is because of lack of consumer interest. Consumer spending shrinks dramatically and less is spent on goods and services, which automatically results in lower production. This is a simple demand and supply concept which becomes more pronounced during bad economic times."

More papers on Fiscal Policies after 9/11:

• Analytical Essay # 8095 : "U.S. Economics after September 11"
• Research Paper # 111410 : "European Union Fiscal Policies"
• Analytical Essay # 130947 : "Monetary v. Fiscal Policy"

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