Stimulus Package

What is a 'Stimulus Package'

A stimulus package is a package of economic measures put together by the government to stimulate a floundering economy. The objective of a stimulus package is to reinvigorate the economy and prevent or reverse a recession by boosting employment and spending. The theory behind the usefulness of a stimulus package is rooted in Keynesian economics, which argues that the impact of a recession can be lessened with increased government spending.

BREAKING DOWN 'Stimulus Package'

The global recession of 2008-2009 led to unprecedented stimulus packages being unveiled by governments around the world. In the United States, the $787-billion stimulus package dubbed the American Recovery and Reinvestment Act of 2009 contained a huge array of tax breaks and spending projects aimed at vigorous job creation and a swift revival of the U.S. economy.

RELATED TERMS
  1. Economic Stimulus

    Attempts by governments or government agencies to financially ...
  2. Package Deal

    An order that contains a number of exchange or deposit items ...
  3. Stimulus Check

    A check sent to a taxpayer by the U.S. government. Stimulus checks ...
  4. Severance Package

    A bundle of pay and benefits offered to an employee upon being ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects ...
  6. Recession

    A significant decline in activity across the economy, lasting ...
Related Articles
  1. Financial Advisor

    Should You Accept an Early Retirement Offer?

    Is it wise to accept an early retirement package? Here's what you need to consider.
  2. Markets

    Will European Deflation Lead to More Stimulus?

    Discover why the European Central Bank is likely to announce a bolder stimulus package after consumer prices declined 0.2% in February 2016.
  3. Markets

    Abenomics Vs. Quantitative Easing: Which Works Best?

    Abenomics and QE are versions of extraordinary stimulus measures initiated by the Japanese government and the U.S government, respectively.
  4. Markets

    Deflation and Debt: Is the United States the New Japan?

    Discover how mainstream macroeconomics has failed Japan and why the United States should take care to avoid Japan's borrow, spend and print model.
  5. Markets

    Central Bankers' Role in Keynesian Economics

    Learn about the role of monetary policy in Keynesian economics, and examine how central banks impacted aggregate demand in the aftermath of the 2008 crisis.
  6. Markets

    Have Stocks Seen the Bottom Yet?

    The market has been turbulent as of late. But have stocks hit bottom?
  7. Markets

    Rifts Emerge Over Stimulus at G20, Markets Rise

    Markets extended their rally Friday morning on a rise in crude oil prices and hopes of further stimulus.
  8. Investing

    Japanese Stock Market Surged After Election Results

    The Japanese stock market soared by 3.98% Monday following Shinzo Abe's coalition-led party's victory in the upper house elections
  9. Markets

    Can Keynesian Economics Reduce Boom-Bust Cycles?

    Learn about a British economist's proposed solution to a common economic problem.
  10. Markets

    A Look At Fiscal And Monetary Policy

    There's a debate over which policy is better for the economy. Find out which side of the fence you're on.
RELATED FAQS
  1. How do government-issued stimulus checks affect the economy?

    Stimulus checks are payments given to individuals by the government based on taxes paid in the previous year. The hope is ... Read Answer >>
  2. Do stimulus checks work?

    In theory, stimulus checks are intended to increase the amount of capital in the economy. By giving back tax dollars in the ... Read Answer >>
  3. How will consumer packaged goods companies' stocks react to changes in oil prices?

    Learn about the consumer packaged goods sector and how the share prices of companies that produce CPGs react to changes in ... Read Answer >>
  4. What are some important financial ratios to evaluate with respect to consumer packaged ...

    Understand various activity and solvency ratios, and learn why these ratios are important when evaluating the consumer packaged ... Read Answer >>
  5. Where does stimulus economics come from?

    Depending on which type of economist you talk to, stimulus economics originated from the ideas of either a book published ... Read Answer >>
  6. What economic factors affect the performance of the consumer packaged goods industry?

    Discover the various economic factors that most significantly impact the performance of companies in the consumer packaged ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center