Do Government Deficits Matter?
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چکیده
nfl S it, HERE HAS BEEN considerable concern about the size of the federal deficit and the rather modest success of the Gramm-RudmanHollings Act to reduce it. The traditional, that is, Keynesian, view of deficit spending in macroeconomics was that it could smooth out fluctuations in economic activity due to gaps between saving and investment that were primarily the result of exogenous shifts in investment. From this perspective, deficit spending was seen as both desirable and necessary to offset cyclical fluctuations in economic activity that were characteristic of capitalist, free-market economies.
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