The problems with a stimulus plan

The stimulus plans in the euro zone will face three difficulties: The heterogeneity of different sectors' situations: demand is already strong in some sectors and very weak in others; stimulating demand in situations where it is already strong is pointless; The high propensity to import: a significant part of the stimulus will benefit the rest of the world outside the euro zone; The high propensity to save: given the uncertainty, households may continue to accumulate precautionary savings and companies may continue to accumulate cash.