----------------- HES POSTING ----------------- The concept of crowding out was a major part of the "Treasury View" in Interwar British economic policy debates. A good place for an overview of this literature (both journal literature and government documents), with references, is in Peter Clarke's _Keynesian Revolution in the Making_ (1988). Another good source on the debate in Britain on crowding out is in Roger Middleton's _Towards the Managed Economy: Keynes, the Treasury and the Fiscal Policy Debate of the 1930's_. One interesting part of the crowding out debates in Britain in this period is that during the process of the debates the Treasury added a twist to their argument; instead of simply arguing that government borrowing would lead to higher interest rates and, hence, to lower private investment, they introduced expectations as an additional source of crowding out. They argued that large scale government borrowing was likely to create uncertainty in the minds of private investors and cause them to pull back on their own investment plans. Both Middleton and Clarke discuss this phenomenon. Bradley W. Bateman, Fellow National Humanities Center ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]