Stimulus Package

DEFINITION of 'Stimulus Package'

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.

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RELATED FAQS
  1. How do government stimuli increase the number of jobs in the private sector?

    The purpose of a government stimulus is to use strategic government spending to revive a stagnant or contracting economy. ... Read Full Answer >>
  2. 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 Full Answer >>
  3. 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 ... Read Full Answer >>
  4. 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 Full Answer >>
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    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
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