Turns out some public spending encourages private investment

Hoocoodnode? Via FTAlphaville:

If you’ve had the misfortune of having to learn economics, you may remember the theory of the “crowding out effect” from your studies.

Popularised in the 1970s, the idea is that an increase public sector investment, and therefore borrowing, has the rather undesirable effect of displacing the private sector’s planned borrowing and investment.

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