A Pedagogical Note on Bond Financing of Government Expenditure

Abstract

The author's use of a dynamic model leads to the conclusion that a necessary condition for a bond‐financed rise in government spending to lead to a new equilibrium level of national income must be the existence of wealth effects in the consumption and money‐demand equations.

Citation

Alpine, R.L.W. (1985), "A Pedagogical Note on Bond Financing of Government Expenditure", Journal of Economic Studies, Vol. 12 No. 4, pp. 58-61. https://doi.org/10.1108/eb002607