<p>Has any economist ever suggested this? Chances are someone has.</p>
<p>Is it a broadly accepted idea among any economists? Well not really, because state-owned enterprise have other problems. They face &quot;soft budget constraints&quot; and lack incentives to operate efficiently. They can be favored by the government (e.g. preferential access to finance or subsidies), thereby distorting the market and harming growth.</p>
<p>For a stimulus, better to hire private companies to build some things you would need to build anyway (but maybe were putting off), such as infrastructure.</p>
<p>Also there are transaction costs to setting up an SOE and then selling it off for every crisis, so its not worth it.</p>

CC BY-SA 4.0
2024-11-12T02:02:32.947Z
2024-11-12T02:02:32.947Z
BB King
<p>When in a recession Keynesian economics generally recommends government stimulus and spending. FDR started a bunch of construction and building jobs for example. Has any economists, papers, suggested that in a recession a government should create some kind of state operated enterprise for infrastructure,manufacturing, or whatever jobs deemed needed and then sell the entity to the private sector when the recession is over to further stimulate the economy?</p>

<keynesian-economics><recession>
Can temporary state-owned enterprises in a recession aid economic recovery and be privatized post-recession?
CrazyDolphin
# Can temporary state-owned enterprises in a recession aid economic recovery and be privatized post-recession?

(Asked by: username_0 on 2024-11-10)

When in a recession Keynesian economics generally recommends government stimulus and spending. FDR started a bunch of construction and building jobs for example. Has any economists, papers, suggested that in a recession a government should create some kind of state operated enterprise for infrastructure,manufacturing, or whatever jobs deemed needed and then sell the entity to the private sector when the recession is over to further stimulate the economy?

**Tags:** keynesian-economics, recession

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## 1 answers

### Answer by username_1 on 2024-11-12. Score: 0

Has any economist ever suggested this? Chances are someone has.

Is it a broadly accepted idea among any economists? Well not really, because state-owned enterprise have other problems. They face "soft budget constraints" and lack incentives to operate efficiently. They can be favored by the government (e.g. preferential access to finance or subsidies), thereby distorting the market and harming growth.

For a stimulus, better to hire private companies to build some things you would need to build anyway (but maybe were putting off), such as infrastructure.

Also there are transaction costs to setting up an SOE and then selling it off for every crisis, so its not worth it.


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