Bowles, David; Ulbrich, Holley; Wallace, Myles - In: Eastern Economic Journal 15 (1989) 3, pp. 203-212
The crowding out debate fails to incorporate the impact of expansionary policy on interest rates for private sector borrowing through changes in perceived default risk. In a modified IS-LM model with default risk dependent on the state of the economy, government borrowing has an indeterminate...