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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

References in periodicals archive ?

In Malaysia, residential and infrastructure projects (government pump priming) will sustain overall construction in the medium term, and residential building will grow at decelerating rates over the five years to 2005, due to a cut-back in the housing target.

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Mr Houston said: "This pump priming is for anybody who has a good idea, but does not have the cash to develop it.

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This was pump priming on a massive scale, and without his commitment it just would not have happened.

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It provides mentoring, "pump priming" finance and an interim manager service, which provides a temporary professional manager to achieve agreed business goals.

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"This pump priming funding allows us to appoint a director for the girls' choir, but will only fund it for a year, so we shall eagerly be seeking funding to enable this position and the choir itself to flourish."