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Crowding Out
(1970s)
The displacement of private spending by government expenditure financed by borrowing.
When a government borrows heavily, interest rates may be forced to rise, thereby curbing individual consumption.
Source:
B M Friedman, 'Crowding out or Crowding in? Economic Consequences of Financing Government Deficits',
Brookings Papers on Economic Activity, vol. ix (1978), 593-641
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