AN EMPIRICAL ANALYSIS OF THE "CROWDING OUT" EFFECT OF FISCAL POLICY IN THE UNITED STATES AND CANADA

In: Kyklos: international review for social sciences, Band 31, Heft 3, S. 424-436

Abstract

SUMMARYThis paper uses both single‐equation and multi‐equation systems to examine whether fiscal policy 'crowds out' private investment. It is found that, for both the United States and Canada, this is in fact the case. In addition, it is shown that this crowding out leads to long term inflation.