While it appears that Quantitative Easing has reached its limits and the FED intends to implement a strategy of gradual exit, there is less clear what available options exist for stimulating the economy.
The monetary policy has been preferred to fiscal policy to fight the recession, at least for United States. While Quantitative Easing has been recurrently applied in many episodes, from QE1 to the more recent QE4, there has been less attention paid to the possible uses of fiscal policy.
The European sovereign debt crisis continues to attract a lot of attention on both sides of the Atlantic. The analysts have proposed many several potential causes for this crisis and, obviously, the lack of fiscal discipline, including the issue of deficit spending, is widely considered as one of the most important ones. An analysis of this issue can shed some light on the problem of deficit spending which is highly debated in the United States in the last years.