Economists Credit Fed For Alleviating Crisis

The $787 billion stimulus package was a good for the economy, but the Federal Reserve played the biggest role in rescuing the U.S. economy from the financial crisis, according to the majority of economists in the latest Wall Street Journal forecasting survey.

“A much worse result would have occurred if nothing had been done,” said survey participant Allen Sinai of Decision Economics, co-author of a paper examining the effects of government intervention with colleague Paul Edelstein. But “the absence of monetary policy easing [by the Fed] would have resulted in a much worse economy than the absence of the fiscal policy stimulus.”

Thirty-eight of the 54 surveyed economists, not all of whom answered every question, said the American Recovery and Reinvestment Act boosted growth and mitigated job losses, while six said the legislation had a net negative effect.

Wall Street Journal

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