• Economic stimulus refers to targeted fiscal and monetary policy aimed at obtaining an economic response from the private sector.

  • Economic stimulus is a conservative approach to expansionary fiscal and monetary policy based on encouraging private sector spending to compensate for losses in aggregate demand.
  • Fiscal stimulus measures - deficit spending and tax cuts; monetary stimulus measures are produced by central banks and may include lowering interest rates.
  • Economists are still arguing about the usefulness of coordinated economic stimulus, with some arguing that in the long run they can do more harm than good in the short term.