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, aggregate demand in the private sector, private consumption and private investment. The research is carried out using quarterly ….3 percent and private investment by 1.3 percent. In terms of level, an increment of 1 shekel in public consumption will increase … aggregate demand in the private sector by 1.3 percent, private consumption by 0.6 percent and private investment by 2 percent …
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In this paper we assess the impact of fiscal policy on private consumption. We find that there is substitution between private and public consumption but that it is of very limited magnitude (approximately 20 percent). It was also found that, in contrast to the Ricardian approach, the method of...
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