The Japanese experience of the 1990s indicates that increases in government spending financed through borrowing will generate

Question

Quizplus · Accepted Answer

The Japanese experience of the 1990s showed that government spending financed through borrowing can have secondary effects that reduce private sector spending and therefore the expansionary impact of fiscal policy. This is in line with some criticisms of Keynesian economics, which suggests that fiscal stimulus may not always have the intended effect.

The Japanese Experience of the 1990s Indicates That Increases in Government