Abstract and Headnote We consider a pure-exchange overlapping-generations model with many consumers per generation and many goods per period. As in Ghiglino and Shell (2000), there is a government that collects taxes, distributes transfers and faces budget deficit restrictions. We introduce

fiscal policy feeds bond market development, while the bond market provides signals in relation to the prudent conduct of fiscal policy. A common dimension in this mutual relationship is the governance environment. The article concludes that instilling fiscal discipline will remain intractable unless

assumes that tax rates are set over time in order to minimize the excess burden of taxation. We suggest hat in several countries the slow rate at which the post-‘73 fiscal deficits were reduced resulted from the difliculties of political management in coalition governments. There is a clear tendency

in public policies, political stability, and other economic indicators. In the case of Sub-Saharan Africa, economic growth is associated with low schooling, political instability, underdeveloped financial systems, distorted foreign exchange markets, high government deficits, and insufficient infrastructure

ABSTRACT. Since China began its market-oriented economic reform in 1979, government budget deficits have been a fact of life. On one hand, the share of resources owned or controlled by the government must be shrunk in order to create a favorable environment for the development of the market economy

Recent total government budget deficits, now running at about 3.4 percent of gross domestic product

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A widespread belief seems to be emerging, at least in the popular press, that the U.S. economy is in the throes of a fundamental transformation, one which is wiping out the 1972–95 productivity slowdown, along with inflation, the budget deficit, and the business cycle. A typical recent comment

No issue in economic policy has generated more debate over the past decade than the effects of government budget deficits. Politicians of various ideologies argue that deficit reduction is critical to the future of the United States and other major economies. Although the economics profession

writings in political economy frame economic analysis of— and moral consideration of—large government budget deficits and the need for fiscal consolidation in the United States. In his book The Moral Consequences of Economic Growth, Friedman emphasizes the salutary effects economic growth