Firms' and shareholders' reduced appetite for (and assessment of) risk Investment could be held back if firms have become more risk averse or if they have reassessed the likelihood of bad outcomes. While it is difficult to differentiate between these two, there are some signs that suggest that one or both have changed post-crisis.
To best achieve its goals, any fiscal package should be structured so that its peak effects on aggregate spending and economic activity are felt when they are most needed, namely, during the period in which economic activity would otherwise be expected to be weak.