The answer to practice problem 12B says:
a decrease in the long-term average budget deficit as a percent of GDP is pro-growth, because it would be a positive for controlling the current account deficit.
But if we are reducing the deficit (so reducing spending) isn’t this anti-growth?
a decrease in the long-term average budget deficit as a percent of GDP is pro-growth, because it would be a positive for controlling the current account deficit.
But if we are reducing the deficit (so reducing spending) isn’t this anti-growth?