Re: fiscal deficit

["Sean Reilly" <seanjreilly@xxxxxxxxxxx>]

"Because money supply is endogenous,therefore, "crowding out" can't arise."

Theoretically, correct, however what I have seen happen in the real world
this is not the case.  There is a so-called crowding out that takes place,
but businesses call it a credit crunch.  So, in practice, I am not so sure
that I agree with the theory.

----- Original Message -----
From: "Kazuhiro Kurose" <kurose@xxxxxxxxxxxxxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Monday, November 12, 2001 5:06 AM
Subject: fiscal deficit


> In the perspective of post Keynesian, the stimulus by fiscal deficit which
> the government run is surely desirable. Because money supply is
endogenous,
> therefore, "crowding out" can't arise. But I wonder if the accumulation of
> fiscal deficit has no effect on any aspects of the economy, however large
> the accumulation is. What do you think ?
>
> **************************************
>   Kazuhiro Kurose
>   Graduate School of Economics and Business
>   Administration, Hokkaido University
>   Kita 9 Nishi 7, Kita-Ku, Sapporo, Japan
>   060-0809
>     TEL: +81-11-716-2111 ex:2786
>  **************************************
>
>