Fiscal policy can boost economy in recessions, but not in booms.
The article discusses how fiscal policy can be used to boost the economy during recessions. Research shows that the impact of government spending on the economy depends on the state of the business cycle. In deep recessions or when the economy is struggling, increasing government spending can have a big positive effect. However, during economic booms, the impact of government spending is not as significant. This means that fiscal policy can be an effective tool to stimulate the economy in tough times, but its effectiveness varies depending on the economic situation.