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On "Real' and "Sticky-Price' Theories of the Business Cycle

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  • McCallum, Bennett T

Abstract

After presenting some facts about the growth of government in Western industrialized countries, possible causes of this development are analyzed from a public-choice perspective. Next, some empirically tested theories which seek to explain this growth are discussed. Finally, possible consequences for efficiency and individual liberty are examined. It is shown that both the number and size of interest groups (age of democracy) as stated by Mancur Olson (1982) and the increasing share of government expenditure in GDP seem to exert a negative influence on the growth rate of GDP. Copyright 1986 by Ohio State University Press.

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  • McCallum, Bennett T, 1986. "On "Real' and "Sticky-Price' Theories of the Business Cycle," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(4), pages 397-414, November.
    • Handle: RePEc:mcb:jmoncb:v:18:y:1986:i:4:p:397-414
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