There has been no phrase in economics as immediately fashionable as “act big”, after Janet Yellen said it was the smartest thing policy could do in response to the coronavirus pandemic. The US treasury secretary was referring specifically to her country, but the phrase has spread internationally faster than the virus itself.  

Countries want to act big with fiscal policy because it protects people from hardship in a period of crisis. It also provides stimulus and hope for the recovery ahead, and supplies real firepower when central banks have already set interest rates to record lows. If things go really well, it might even deliver better economic performance than before the pandemic...

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