Tuesday, February 10, 2009

Crowding Out: Becker and Murphy Agree with Me

It's pretty obvious that the stimulus bills will reduce private spending. Becker and Murphy give their explanation today.

Here are some of mine.

1 comment:

Michael S. said...

Hi Casey,

Do you think that the short run government spending multiplier here could be negative (<0) such that GDP in the short run would decrease as a result of the stimulus package. Or do you think it is more likely to be between 0 and 1 as Becker and Murphy suggest (GDP increases on net but at the expense of private sector activity).

Michael S.