Disclaimer - On stock markets, my views may not be used to make investment decisions. I may or may not hold positions in the market. My views on Economics often contradict the stand of mainstream economists.
Tuesday, July 7, 2009
Govt. spending - The multiplier effect
Just a passing thought on govt spending.
Modern Economic theories tells us that govt. spending has a multiplier effect. In other words, if govt. spends Rs 100/-, the GDP goes up by more than Rs. 100/-. Really?
If that were true, should not the socialist economies have been very rich?
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