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More Stimulus = Worse Growth

May 20, 2021 1:53 PM ET1 Comment
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A review of academic research on government size and economic growth concludes that increases in government spending or increases in government size on a sustained basis reduces economic growth. 

I recently published a video breakdown of this topic on YouTube, outlining why a continued increase in fiscal stimulus will reduce long-term economic growth defined by real GDP per capita. 

You can watch that video on YouTube by clicking here

Not all government spending is bad and maximizing real economic growth is not always the number one priority of a government. Still, the literature is clear that a material increase in the size of the public sector defined by total expenditures as a percentage of GDP will result in lower long-term real economic growth.

You can watch a more detailed breakdown of this topic through the lens of academic research by clicking here.

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