Why Fiscal Stimulus Programs Fail, Volume 1: The Limits of Accommodative Monetary Policy in Practice

This book offers a series of statistical tests to determine if the “crowd out” problem, known to hinder the effectiveness of Keynesian economic stimulus programs, can be overcome by monetary programs. It concludes there are programs that can do this, specifically “accommodative monetary policy.”  They were not used to any great extent prior to the Quantitative Easing program in 2008, causing the failure of many fiscal stimulus programs through no fault of their own. The book includes exhaustive statistical tests to prove this point.  There is also a policy analysis section of the book. It examines how effectively the Federal Reserve’s anti-crowd out programs have actually worked, to the extent they were undertaken at all. It finds statistical evidence that using commercial and savings banks instead of investment banks when implementing accommodating monetary policy would have markedly improved their effectiveness. This volume, with its companion volume Why Fiscal Stimulus Programs Fail, Volume 2: Statistical Tests Comparing Monetary Policy to Growth, provides 1000 separate statistical tests on the US economy to prove these assertions.