Keynes’ Plant-Pulling Fiscal Theory: Retrieving Hayek's Overcoat

8 Pages Posted: 18 Mar 2014 Last revised: 4 Apr 2014

See all articles by Hak Choi

Hak Choi

Chienkuo Technology University - Department of International Business; Chung-Hua Institution for Economic Research

Date Written: March 17, 2014

Abstract

This paper reestablishes Hayek’s assertion that buying a new overcoat will reduce output and unemployment. It is because the spending is like pulling rice plants to help them grow: it simply kills the plants. The proper way to encourage more output, and hence to enjoy more consumption, is by alleviating tax burden.

Keywords: Fiscal Spending, Plant Pulling, Mencius

Suggested Citation

Choi, Hak, Keynes’ Plant-Pulling Fiscal Theory: Retrieving Hayek's Overcoat (March 17, 2014). Available at SSRN: https://ssrn.com/abstract=2410634 or http://dx.doi.org/10.2139/ssrn.2410634

Hak Choi (Contact Author)

Chienkuo Technology University - Department of International Business ( email )

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Chung-Hua Institution for Economic Research ( email )

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