"Now, suppose you’re considering the effects of policies that will, other things equal, raise or lower aggregate demand — that is, shift the IS curve. In normal circumstances, where the IS curve intersects an upward-sloping LM, such shifts have limited effects on output and employment, because they’re offset by changes in interest rates: fiscal expansion leads to crowding out, austerity to crowding in, and multipliers are low."
Note austerity leads to ....crowding in !
Shades of early Billy C -benson - booby Rubin bilge
Vickrey fanatics must crush this absurd hicks interest rate school of normal wates macro navigation
We've known since Kalecki
interest rates are the bunk as aggregate demand managers