Budget Deficits and Economic Performance

Persistent and high budget deficits are one the major problems of many advanced economies. Yet some of the remedies which have been employed to correct this situation have created as many problems as they have solved. A fixation with "balancing the budget" treats government outlays and tax revenues merely as accounting identities, devoid of economic content. In reality, the ramifications of budgetary changes on interest and exchange rates, the international trade balance, and global capital flows, are enormous. InBudget Deficits andEconomic Performance, the authors focus on these wider aspects of budgetary reform. The book divides into three logical sections, which examine four historical case studies, explore the institutional aspects of monetary and fiscal discipline, and the international transmission effects of United States macroeconomic policies on European economies specifically, those of Britain, France, Germany, and Italy. In conclusion, the authorspresent a theoretical examination of optimal bank policy balanced with institutional pressures in conjunction with the political constraints within which the central banks must operate. The book is written in a straightforward style, and theoretical and empirical results are supported by explanations and summaries of the economic theories behind them, making it accessible to the general reader interested in this area.Burdekin, Richard C. is the author of 'Budget Deficits and Economic Performance' with ISBN 9780415072625 and ISBN 041507262X.