IMF Chief Economist, Olivier J. Blanchard, has recently argued in a French newspaper in favor of fiscal stimulus to fight the on going economic slowdown. In particular he advocates that fiscal expansion should take the form of increased spending rather than reduced taxes. A recent paper I am working on with Philippe Aghion from Harvard University entitled "Credit Constraints, Cyclical Fiscal Policy and Industry Growth" looks at a different but close question: to what extent does stabilizing -counter-cyclical- fiscal policy contribute to raise growth in the long run?