I was wondering what a conventional (estimated) macroeconometric model implied for a sustained 7.7% increase in government consumption and investment as a share of GDP implies for output…
So, where you think you will end up depends a lot on where you think you are now…Thomas Aquinas, citing Aristotle, in De ente et essentia: "A small mistake in the beginning is a big one in the end…."
Implied Output Response to Demand Side Shifts in the Friedman Scenario under Local to Potential Assumptions
Menzie Chinn | Professor of Public Affairs and Economics. Robert M. La Follette School of Public Affairs, University of Wisconsin–Madison