Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Some observations on countercyclical fiscal policy and its effects on economic growth / Trygve Haavelmo, Universitetet i Oslo - Oslo - Norge

Collection:: Economics Books

322 PONTIFICTAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 26 city being proportional to capital is very central. Rut this would of course depend essentially on what alternatives are considered more realistic. I should also like to add an explanatory remark in con- nection with my assumption of constant population. The reason why I made this assumption here is one of simplification and at least off hand I don’t think that this particular assumption is central in explaining my main results. Then there was the remark that actually in statistical figures there is not very much correlation between the rate of public investment and growth. Well, I don’t know about that in detail, but I would dare say that probably we have not had so much of such policy that it would show up very much in the figures. My model illustrates more a policy that is being talked about, rather than a policy that has actually been carried out in full. Then there was the point about business cycles as an element in the model. I admit that this is not a business cycle theory and it was not meant to be. I have made the strong assumption about cyclical movements in private investment just to see how the system works if investment runs that way. I could refer to many sources where assumptions have been made about the autonomy of private investment. Then there was the comment from Mr, FisHer. He correctly pointed out, in connection with the formula he referred to, that if you want to consider matters over time, of course the amount of capital changes gradually. Now the point of the formulas on page 7, which he referred to, is just to make some comparative studies, assuming that you could instantaneously shift the rate of private investment around, since this is the autonomous factor in my mo- del. I just wanted to see what the instantaneous effect is and I can also, at the same time, answer another comment that comes in here. I am not saying that it is bad that you get more consumption and less investment or that it is good that you get high growth and lower consumption. I'm just saying that I doubt very much whether cyclical movements in the preferences are realistic. I will also add that one must be aware of the essential dynamic aspects of the model. It is by no means certain that you will not in the se- [81 Haavelmo - pag. 20

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