8. Conclusion Fiscal stimulus applied to the economy over the last two years is partly responsible for the economy's robust 1983 recovery. However, economic growth, rapid now, will slow across 1984 and 1985 as interest rates rise in response to growing congestion in financial markets. These interest rate pressures are associated, in part, with public-sector credit demands remaining at unprecedented levels at the same time that private-sector credit demands are rising rapidly. While caution is in order in any uncharted territory, as this is, measures designed to restore the budget to its more normal relationship to the economy deserve consideration. |