Mervyn King, Columnist

The Debate About Stimulus Is Missing the Point

This is not a normal recession, and a conventional stimulus isn’t what’s needed.

February 15, 2021 at 7:30 AM UTC

Mervyn King was governor of the Bank of England from 2003 to 2013. He is the Alan Greenspan Professor of Economics at NYU Stern School of Business and professor of law at NYU School of Law, and author (with John Kay) of “Radical Uncertainty: Decision-Making Beyond the Numbers.”

Not for lack of demand.
Photographer: Spencer Platt/Getty Images

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Stimulus is today’s economics buzzword. With a new administration in Washington, amid an accelerating rollout of mass vaccinations, policy discussion in the U.S. revolves around the size of the next fiscal package. Similar debates are taking place across the world. But the word “stimulus” is causing a lot of confusion. The focus on the mere size of the next plan draws attention away from what is actually going on in our economies.

In many ways, stimulus is beside the point. The key words ought to be support and shift — support in the short run for those worst affected, and the shift of resources that will be needed later, once a successful vaccination program (not to be taken for granted) has been largely completed.