search query: @author Wohar, M.E. / total: 1
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| Author: | Wohar, M.E. |
| Title: | How effective is fiscal policy? The US experience |
| Journal: | Weltwirtschaftliches Archiv
1988 : VOL. 124:3, p. 459-479 |
| Index terms: | FISCAL POLICY USA GOVERNMENT BONDS |
| Language: | eng |
| Abstract: | There was a long debate over whether bond-financed budget deficit is more effective in boosting demand than money financed deficit, or is it effective at all. The present article uses a flex-price macroeconomic model to decide this problem. The model is estimated equation by equation with two-stage least squares over a 60 years long period. The results indicate that in the 1923-60 period federal purchases stimulated demand and had no significant impact on inflation, whereas for the 1961-82 period the reverse is true. For the former period crowding-out of private investment, for the latter Ricardian equivalence holds. |
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