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German Economy Ministry Backs Up OECD Call For Public Investment Stimulus

The German Ministry for Economic Affairs and Energy  has actually published an article that insists that there is a wide consensus in the economic literature that public investments do not just trigger a short-term demand effect but can also improve growth performance over the longer term. This then leads the authors to recognise that, because of the positive feedback effects on tax revenues, even (yes, even!) a deficit-financed public investment stimulus can result in improved public finances, certainly against the background of historically low interest rates.

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