Government budget restraints debunked: New insights on fiscal policy implications emerge.
Some economists argue that traditional macroeconomic analysis has not properly considered how government deficits are financed, leading to incorrect conclusions about the effects of government spending. They suggest that the failure of the Keynesian model is due to a flawed description of how the government sector behaves. By addressing these issues, the goal is to provide a more accurate and coherent understanding of the impact of government budget restraints on fiscal and monetary policies.