Christian Schoder in a recent paper (here; subscription required), following in the steps of the classic paper on the subject by Fazzari et al. (1988) and looking at the micro data on investment concludes that:"Overall, demand constraints seem to be crucial factors contributing to the slowdown of accumulation in times of economic distress relative to credit market conditions. In contrast to the prediction of the financial accelerator literature that credit constraints tighten in the downturn (relative to demand constraints) as net worth deteriorates, the cash-flow coefficient does not exhibit a clear counter-cyclical pattern.
Naked Keynesianism
Investment, interest rates and the accelerator: more evidence for the US
Matias Vernengo | Associate Professor of Economics, University of Utah
Investment, interest rates and the accelerator: more evidence for the US
Matias Vernengo | Associate Professor of Economics, University of Utah
2 comments:
Che Vernengo
"Sei nicht verkrampft"
Yadda yadd yadda
If the gov mint & treasury were the only printing press & library as a matter of analogy, then Yellen's understanding is if deficits are as if when we loan out too many books to the real economy private sector and the shelves are bare inside the tsy/library then the solution is not to press out more books for more children & assets being born since on records there are too many "checked outs" or absent books or negative inventory or negative numbers.
Instead her solution is to stop pressing books all together!
This is not promoting general welfare of Americans and is NOT pro-life.
I can only hope that it is a ruse for her to slide by Tea party Ayn Rand fascists and she will spin out...
The shelves are empty; time for the library to recall all the books and penalize & fine the late returns. Don't make & press any new books because the shelves are bare as deficits and those shelves will be empty when our grandkids grow up.
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