5.4. Fiscal or Economic Stimulus

Fiscal or Economic Stimulus refers to attempts by government to financially stimulate an economy. An economic stimulus is the use of monetary or fiscal policy changes to kick start a lagging or struggling economy. Governments can use tactics such as lowering interest rates, increasing government spending and quantitative easing, to name a few, to accomplish this.

The term economic stimulus became an everyday economic term following the recession created by the 2008-2009 Credit Crisis, which caused most, if not all, of the world's nations to slowdown, with many entering recessions and some depressions. Governments in many cases took unprecedented measures to stimulate lame economies through numerous economic measures.