Articles
The effect of government spending on the economic cycle: An alternative vision
Published 2015-01-01
Keywords
- effective demand,
- economic fluctuations,
- unemployment,
- fiscal policy,
- keynesian multiplier
How to Cite
Velázquez Orihuela, D. (2015). The effect of government spending on the economic cycle: An alternative vision. Estudios Económicos De El Colegio De México, 30(1), 93–140. https://doi.org/10.24201/ee.v30i1.24
Abstract
In this paper, we built a general equilibrium model in order to analyze how the prices and allocations are changed by the government consumption which is financed with debt. It is shown the period in with the government spending the employment and output increase. However, in subsequent periods will put the economy on a path of growth (decline), if government spending generated more (less) resources than required to finance.
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