Abstract
This chapter compares this book’s short-run Keynesian model results with those predicted by the long-run Solow growth model when investment is reduced due to declines in available savings, and finds they are the same. Both predict lower GDP and standards of living than would otherwise occur. Also, eight tests are made to determine if stimulus programs have net positive psychological effects on the population, inducing additional spending and its stimulus effects. Eight tests could not confirm that this occurs.
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Heim, J.J. (2017). Dynamic Effects. In: Crowding Out Fiscal Stimulus. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-45967-7_11
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DOI: https://doi.org/10.1007/978-3-319-45967-7_11
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Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-45966-0
Online ISBN: 978-3-319-45967-7
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