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  • Essay / Fiscal Policy in the Great Recession: Analyzing the Issues...

    Following the Great Recession of 2007 to 2009, the United States government implemented various fiscal policies in an effort to stimulate the 'economy. How the government responded as well as how those responses will affect the U.S. economy in the future is the subject of a proposed research study. To ensure an appropriate focus for the proposed research study, issues in the existing literature need to be evaluated. This article is structured as follows. To better understand the Great Recession, the first section includes a review of some of the major causes. The second section describes some of the government's fiscal policy responses to the Great Recession. In the third section, existing relevant literature relating to studies of fiscal policy implemented in response to the Great Recession will be discussed with a focus on potential issues. For problems noted, resolution recommendations will be included. The objective of this article is to examine relevant issues that may require further examination as part of a research project on the long-term effects of fiscal policy implemented by the U.S. government in response to the Great Recession. The new millennium brought a real estate boom. which had reached an unsustainable level (Pollock, 2011). Housing prices increased rapidly and Baker (2010) noted an increase in housing prices of over 70% between 1995 and 2006. For example, he noted that average housing prices in Los Angeles increased increased by more than $400,000 during the period from 1995 to 2006 and by approximately $519,000. in San Francisco. Prices across the country have also increased significantly (Baker, 2010). To encourage homeownership, banks have promoted creative financing options (i.e. variable rate, interest only,...... middle of document ......doi.org /10.1016/S0047-2727(99)00022-5Kumhof, M., Laxton, D. and Leigh, D. (2013). . j.jmacro.2013.10.005Lee, Y. and Gordon, RH (2005). 2010). The case against fiscal stimulus. Harvard Journal of Law and Public Policy, 33(2), 519-529. . (2012). Fiscal Policy and State Economic Growth: Long-Term and Short-Term Economic Letters. 2012.02.023Pollock, AJ (2011)...