Vasilev, Aleksandar - In: Theoretical and Practical Research in Economic Fields 11 (2020) 1(21), pp. 19-24
In this paper we provide a theoretical basis for the so-called” Armey curve,” the inverted U-shape relationship between the level of government purchases and GDP growth, named after Armey (1995). We use an otherwise standard Keynesian model, augmented with a quadratic relationship between...