انباشت سرمایه، بیکاری و شکست خود برآورده اصلاحات اقتصادی

I consider fiscal reform and the consequences of expectations about reform cancellation. The reform implies reduced taxes and the laying off of employees in an inefficient public sector. If the resulting unemployment level declines sufficiently fast, the reform is completed. On the other hand, if high unemployment levels prevail for too long, the reform is cancelled. Cancellation affects the return on capital negatively. Hence, expectations about cancellation will depress capital accumulation and increase the level of unemployment. As a result, multiple rational expectation equilibria may arise where expectations about cancellation prove self-fulfilling. The modelling framework is Leontief technology in combination with Ramsey optimization that exhibits simple and attractive algebra.