Fiscal free lunch in liquidity trap: government spending can boost economy.
The study looks at how increasing government spending during a prolonged economic downturn, known as a liquidity trap, can have a big positive impact on the economy with minimal costs. However, the researchers found that the benefits of this "fiscal free lunch" may decrease as spending levels go up. This means policymakers need to be careful about how much they increase spending to get the best results for the economy and government debt.