Are EU budget deficits stationary?

EU research budget boost

flee abroad, while none from outside Italy can penetrate the system. After various reforms and several rounds of decentralisation followed by recentralisation, the whole process may have to be reconstructed from scratch. " A recent bill passed last year intends to [...] promote meritocracy, " Calef adds, " but it is not very clear whether it can succeed. " This is a particularly sensitive area,...

99 / 09 Are Budget Deficits Excessive in the UK ?

In this paper we apply a thorough cointegration analysis to annual time-series data for the U.K. in the period, 1948-1997, to examine whether government revenue and expenditure have been congruent. The data do provide considerable evidence of a cointegrated long-run relation between government revenue and expenditure in the U.K. during this period implying that the two have been congruent in th...

Optimal Budget Deficits

Do Budget Deficits Cause Inflation ?

In 2004, the federal budget deficit stood at $412 billion and reached 4.5 percent of gross domestic product (GDP). Though not at a record level, the deficit as a fraction of GDP is now the largest since the early 1980s. Moreover, the recent swing from surplus to deficit is the largest since the end of World War II (Figure 1). The flip side of deficit spending is that the amount of government de...

Commentary: What Do Budget Deficits Do?

The title of Ball and Mankiw’s paper asks: What Do Budget Deficits Do? One answer to that question is a restatement on the pure theory of debt-financed budget deficits. An alternative answer would develop the effects on the U.S. or world economies on the assumption that the U.S. federal government balances its budget by reducing spending, instead of raising tax rates, or running deficits equal ...