Stimulus
STIM-yoo-lus
/ˈstɪmjʊləs/
An action or policy designed to encourage economic activity, often by increasing government spending or reducing taxes.
Economic stimulus aims to boost demand and employment during a downturn. It can be fiscal (government spending/taxation) or monetary (central bank actions).
The story behind the word. The word 'stimulus' comes directly from Latin 'stimulus,' meaning 'a goad, a prick, a spur.' It referred to a pointed stick used to prod animals. In English, it first appeared in the 17th century with the sense of something that incites to action. Its economic meaning, referring to measures to 'prod' or 'spur' the economy into activity, became prominent in the 20th century, particularly during recessions.
Word relationships
- incentive: A thing that motivates or encourages one to do something, broader than 'stimulus'.
- impetus: The force or energy with which a body moves or with which something is done, less about policy and more about driving force.
- austerity: Policies aimed at reducing government budget deficits through spending cuts and tax increases.
- contractionary policy: Policies designed to slow down economic activity.
Word family
- stimulate (verb): to encourage something to grow, develop, or become active
- stimulating (adjective): encouraging or arousing interest or enthusiasm
Collocations
- economic stimulus
- fiscal stimulus
- monetary stimulus
- stimulus package
- provide stimulus
Example sentences
- "The government approved a massive fiscal stimulus package to help the economy recover from the pandemic-induced slowdown." Discussing government policy.
- "Critics argue that the proposed stimulus is too small to have a significant impact on unemployment." An economic analysis.
Memory hook
Think of a 'stimulant' or a 'shot in the arm' for the economy to get it moving. Economic Shot
When not to use
Do not use 'stimulus' to refer to a general incentive or motivation in a non-economic context; use 'incentive' or 'motivation' instead.
Fun facts
- The concept of using government spending as a stimulus was popularized by John Maynard Keynes during the Great Depression.
- Debates often arise about the effectiveness and potential side effects (like inflation or increased debt) of large-scale stimulus packages.
Related words
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