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

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

Collection:: Economics Books

SEMAINE D’ETUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC. 507 Assumption 4. The level of public investment activity is assumed to be proportional to total « desired savings » in the economy when operating at full capacity. The meaning of this needs a little further explanation. Available resources at full capacity, after allowing for public consumption xo, is equal 'o (1-ÿ)aK. If an income corresponding to this flow of resources were at the disposal of consumers, they would want to spend «(1 - Y)aK +f of it for xp. The remainder, available for public and private investment activity, would be equal to (1—a)(1—7y)aK—_ (which is assumed to be initially positive). Our « assumption 4 » can then be written as 2 6) « Ro - 5 j\a —0)(1—y)aK—5 where 8 is a constant over time. Alternative levels of à (includ- ing &=o or &=1) may be considered. Under the specifications describing the details of Assump- tion 4 the maximum flow of production available for private investment would be 7 gM NAN TU More special assumptions concerning the nature of fiscal policy on the one hand, and the nature of private investment activity on the other hand will be introduced in Section 4. The simplifying assumptions introduced above are, of course, very drastic and grossly unrealistic in many aspects. In one respect, however, they are not disturbingly unrealistic, namely in their degree of similarity to the kind of models on which much of the theory of fiscal measures for full employment is based. If this is correct, it would seem of interest and fair enough to study the efficiency of fiscal policy under the as- sumptions that we have introduced. Haavelmo - pag. _

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