Recent quotes:

Keynesian Multipliers, Investment Accelerators, and Crowding-in - Washington Center for Equitable Growth

I, however, read this as not quite the “paradox of thrift”, however, but rather as the investment accelerator. As I read the IMF’s *World Economic Outlook* chapter 4 section on “How Much [Investment Weakness] Is Explained by Output? Insights Based on Instrumental Variables”, they are saying that *if* the government undertakes fiscal austerity and *if* there is not full monetary offset in order to hold real GDP to its pre-austerity path, *then* investment will be relatively weak. The absence of full monetary policy offset seems to me to be key–at least when I teach “crowding out”, it is something that happens as a consequence of full monetary offset, and thus of a stable real GDP path, in the event of a shift in government spending and taxes. Nevertheless, the strong accelerator effects that the IMF team finds are very interesting–and are yet another reason why I find that I keep raising my estimate of what the simple Keynesian multiplier is.
#Investment-Accelerator - equitablegrowth.org