pump priming

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Pump Priming

Any government action taken to spur economic growth, especially when growth is sluggish or negative. Pump priming is nonpartisan; that is, pump priming policies may be conservative (e.g. tax cuts), liberal (e.g. increased spending) or some combination of the two. The term originated during the Great Depression and fell out of use after World War II. However, it came back to some extent during the late 2000s recession.

pump priming

spending by the government on PUBLIC WORKS, etc., that is aimed at increasing AGGREGATE DEMAND in order to stimulate economic activity and raise NATIONAL INCOME. Increased government spending will, through MULTIPLIER effects, enlarge spending in other sectors of the economy, serving to reduce UNEMPLOYMENT and increasing output of goods and services.

See DEMAND MANAGEMENT, GOVERNMENT EXPENDITURE.

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