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Relevance beyond the crisis: Fiscal policy’s moment
The Covid-induced economic crisis has led policymakers to put in place large fiscal rescue packages including new spending, tax cuts and subsidies. Governments will now be tempted to spend more to boost the recovery. Soon, however, countries will have to pay for the debts they have rung up. Those that favor tax increases could be in for a drawn-out slowdown. The ones that cut spending will more quickly achieve a sustainable economic recovery.