Coaxing spending out of the private sector, especially investment spending, has never been an easy matter. What
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Coaxing spending out of the private sector, especially investment spending, has never been an easy matter. What persuades investors to part with their money? Economist Stephen Fazzari provided one answer to that question in his study of 5,000 U.S. manufacturing firms. Fazzari found that interest rates exerted far less influence on investment decisions than either sales growth or a firm's available funds or financial conditions. What do Fazzari's findings suggest about the importance of Classical cost-side factors and Keynesian spending-side factors in the investment decisions of manufacturing firms? Also, what do Fazzari's findings suggest about what public policies might effectively promote investment? (Post-Keynesian)
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