Deficits and investment, Deficits and investment: Suppose

Deficits and investment

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Deficits and investment: Suppose the government decides to reduce taxes today by 1% of GDP, financed by higher borrowing, with the borrowing to be repaid 10 years from now with higher taxes. Discuss the various arguments about what effect this will have on the investment rate today.

Reference no: EM131092395

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