Do Government Loans Cause Inflation?

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...

Do Government Guaranteed Small Business Loans Promote Urban Growth?

This paper examines the impact of government guaranteed small business loans on urban economic growth, and compares the growth impacts of government versus market financed entrepreneurship. OLS estimates indicate a significant and positive relation between the Small Business Administration’s guaranteed loans and metropolitan growth between 1993 and 2002. However, first-difference and instrument...

Political Determinants of Government Loans in Japan

This paper examines the political influence on government bank lending decisions using the prefecture level panel data on Japan’s government loans from 1975 to 1992. I find that prefectures that were represented by more influential members of the ruling party, the Liberal Democratic Party (LDP), tended to receive more government loans. I also find that the amount of government loans tended to i...

Do Government Guaranteed Small Business Loans Promote Economic Growth and Entrepreneurship?

This paper examines the impact of government guaranteed small business loans on economic growth, and whether government guaranteed loans crowd out new businesses financed through the market. OLS estimates indicate a significant and positive relation between the Small Business Administration’s (SBA) guaranteed loans and metropolitan growth between 1993 and 2002. However, endogeneity hinders caus...

Does Wage Inflation Cause Price Inflation?