>> . . .
>>Well, the problem is that there is no evidence that such measures work.
>They certainly did not work in the depression, when 1937 slump occurred in
>the midst of lavish pump-priming.>
>
>Year GDP Surplus
> (Deficit-) Surplus/GDP
>
>1936 82.7 -3.2 -3.9%
>1937 90.8 .5 .6%
>1938 84.9 -1.5 -1.8%
>
>Not too lavish. In these terms, 3.9% was a
>modest effort, the surplus in '37 was no
>effort at all, and 1.8% ain't much as deficits
>go.
Wasn't there both a fiscal and monetary tightening in 1936-7, as rentier fears mounted of deficit-driven inflation, making the shift of 4.5 points in the fiscal stance intentional, not cyclical? I think Thomas Ferguson has a paper on this.
Doug