On the other hand, the multiplier was only part of the story for Harrod and Domar who argued that, while firms might ignore the
capacity effects of investment in the short run, in the long run they would adjust investment to eliminate the under-- or over--utilization
of capacity. Thus, in the Harrod-Domar view the multiplier relationship is a short-run one. Over the long run the economy would grow
along the warranted path at the normal rate of capacity utilization. Government spending and taxation policies in such a context are
more complex than they are in the short-run multiplier story. For example, as Harrod (1973) shows, an increase in government
spending accelerates output in the short run while lowering the warranted growth rate.