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

SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIOUE ETC. 514 progress (and this is the case in HAAVELMO’s paper), it is impossible to derive the conclusion that there can be an indefinite increase in real consumed income, as is the case in HAAVELMO’s paper (rela ion 4.8). My second observation is the following: in any case is the for- mula verified by facts? Do we observe that there is a correlation between the rate of growth and the volume of public investment? As far as I know, it is impossible to derive that conclusion from :he data we have. A third point: It seems to me it is very difficult to assume some oscillations of private investment (equation 4.1) without in- troducing the monetary aspects explicitly. In fact it is certain that f there is a depression it can be fought efficiently by making public nvestment, but under one very important condition. This is, that he public investment be combined with creation of money, Ii public investment is not combined with the issue of new money, ‘he global effect for the whole economy will remain the same as it was in the past. With public investment there can be a positive multiplier effect but if this public investment is financed by a di- minution of spending elsewhere, there is a negative multiplier effect 2lsewhere and the global effect on the whole economy is o. Thus to have the advantage of full employment, it is not public invest- ment which is important but the creation of new money. And if, nstead of undertaking new public investment, one could imagine the state spending its money in some other way, for instance by giving subsidies to people, anything which is not investment but new expenditure, the same effects will be generated. So, in my opinion, what is very important for full employment is the overall expenditure of the economy as a whole and not public investment. My fourth point is that public investment is also subjected to cyclical fluctuations and if equation (4.1) were valid for public in- vestment, the results would be absolutely different. The HAAVELMO paper is very interesting, and, for me, quite thought provoking, but in my opinion the conclusion at which i arrives derives directly from hypotheses which are very questionable Haavelmo - pag

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