A massive fiscal stimulus and, until recently, aggressive monetary easing have been successful in raising bond and real estate prices to unprecedented levels, inducing a credit boom that has prevented private consumption from falling. While it might still be too early to say that it worked, the strategy has indeed, for the time being, prevented the United States economy from slipping into a severe depression after the collapse of the stock market at the turn of the millennium.

Publication(s):
Policy Note 2005/3

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