Crowding-Out | tutor2u Economics
Student videos

Crowding-Out

  • Levels: AS, A Level, IB
  • Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC

This revision video looks at the arguments for and against the crowding-out view of higher government spending and borrowing.

Crowding-Out

Supporters of the crowding-out view argue that higher state spending and borrowing can be inefficient and might lead to increased real interest rates and taxes for the private sector which eventually undermines the impact of a fiscal stimulus. 

Keynesian economists counter that well-targeted and timely stimulus spending helps to support growth, output, jobs and competitiveness. Indeed higher government spending can be partially self-financing and an important policy option when private demand is depressed, for example following an external shock.

Subscribe to email updates from tutor2u Economics

Join 1000s of fellow Economics teachers and students all getting the tutor2u Economics team's latest resources and support delivered fresh in their inbox every morning.

You can also follow @tutor2uEconomics on Twitter, subscribe to our YouTube channel, or join our popular Facebook Groups.

Recruitment

Advertise your vacancies with tutor2u

Much cheaper & more effective than TES or the Guardian. Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences.

Find our more ›

Advertise your teaching jobs with tutor2u

A New Home for tutor2u Resources

We've just flicked the switch on moving all our digital resources to instant digital download - via our new subject stores.

For every subject you can now access each digital resource as soon as it is ordered. This will always be the latest edition of each resource too (and we'll update you automatically if there is an upgraded version to use).

Simply add the required resources to your cart, checkout using the usual options and your resources will be available to access immediately via your mytutor2u account.