2016

Lacy Hunt on Negative Multiplier of Government Debt

2016-07-07 Safehaven and more

Safehaven writes that Lacy Hunt (Hoisington's Second Quarter Review) takes on the widespread Keynesian belief that government spending boosts real (inflation adjusted) GDP. When explaining how deficit spending restrains economic growth Safehaven refers to a study by Andreas Bergh and Magnus Henrekson, IFN, explaining that there is a "significant negative correlation" between the size of government and economic growth.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se