Economists disagree on the importance of intertemporal substitution in generating real effects from fiscal policy.

Question

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While some economists believe that intertemporal substitution (i.e. people changing their consumption patterns over time in response to changes in taxes or government spending) is a key factor in determining the real effects of fiscal policy, others argue that it is less significant than other factors like multipliers or income effects. Therefore, there is disagreement on this issue among economists.

Economists Disagree on the Importance of Intertemporal Substitution in Generating