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Industrial Policy

Keynesian stimulus according to Taleb

Ryan Hahn's picture

I just realized that what is called "Keynesian stimulus" works differently when the government is starting off a situation of deficit. The math would produce different results, which makes me wonder why economists cannot spot it (I inject more perturbations and see massive fragility). In one case, to make an analogy to an individual, you can invest money you have on the side(assuming you've had suspluses [sic] from the past). In the other, you fragilize yourself by borrowing, and transfer the liabilities cross-generations.


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