I read this long time pending paperfrom Romer Duo:
This paper analyzes the contributions of monetary and fiscal policy to postwar economic recoveries. We find that the Federal Reserve typically responds to downturns with prompt and large reductions in interest rates. Discretionary fiscal policy, in contrast, rarely reacts before the trough in economic activity, and even then the responses are usually small. Simulations using multipliers from both simple regressions and a large macroeconomic model show that the interest rate falls account for nearly all of the above-average growth that occurs early in recoveries. Our estimates also indicate that on several occasions expansionary policies have contributed substantially to above-normal growth outside of recoveries. Finally, the results suggest that the persistence of aggregate output movements is largely the result of the extreme persistence of the contribution of policy changes.
I don’t have a free version of the paper (NBER papers are not free for all). In all the paper says monetary stimulus alone is enough to get economies out of recession. Moreover, automatic fiscal policy works better than discretionary fiscal policy. But as the Chief economist for President Obama she is doing the opposite- discretionary fiscal stimulus.
If I add this paper to her Great Depression paper which says monetary policy alone was enough to cure depression, it seems monetary policy has an advantage compared to fiscal policy.
All this brings me back to the point I made earlier- Christina Romer says monetary policy works in research but believes fiscal policy can do the trick in this crisis. But why should this be? What is so different about this crisis that discretionary fiscal stimulus seems to be the answer?