Title: Macroeconomic effects of budget deficits: further international evidence
Abstract: This paper investigates the effects of budget deficits on money growth, inflation, investment and real output growth using annual data from a sample of 32 countries. The findings can be summarized as follows: (i) deficits are generally not monetized and, therefore, they do not produce inflation via monetary expansions; (ii) deficits are not inflationary even through their (alleged) aggregate demand effects; (iii) deficits are negatively correlated with the rate of growth of real output, but this may just reflect their countercyclical nature; and (iv) increased deficits do appear to retard investment usually after one or two years. (JEL E63, H62).
Publication Year: 1994
Publication Date: 1994-04-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 60
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