Fiscal policy, profits and investment: some additional evidence

Applied Economics Letters (Impact Factor: 0.23). 10/2008; 15(13):1047-1051. DOI: 10.1080/13504850600993515
Source: RePEc

ABSTRACT This article provides time series evidence on the effects of fiscal policy on profits and investment in the US. In addition to neoclassical models of investment and profits we also consider Keynesian models. Our findings provide some support for the neoclassical views. However, Keynesian explanations, which allow for the effects of the real interest rate, receive strong support from the data.

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