What impact will fiscal policy have on French growth?

By Eric Heyer

The proper framework for analyzing the French economy is a large economy that is not very open, and not a small open economy: the country’s economic situation has deteriorated sharply and is still far from its equilibrium position (mass unemployment, the existence of excess capacity), and its European neighbours are adopting identical approaches to fiscal policy. Under these conditions, everything indicates that the fiscal multipliers are high. The theoretical debate about the value of the multiplier and the role of agents’ expectations must therefore give way to the empirical evidence: the multipliers are positive and greater than one. Continue reading “What impact will fiscal policy have on French growth?”

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