TY  - JOUR
AU  - Grossman,Herschel I.
TI  - The American Fiscal Deficit: Facts and Effects
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 934
PY  - 1982
Y2  - July 1982
UR  - http://www.nber.org/papers/w0934
L1  - http://www.nber.org/papers/w0934.pdf
N1  - Author contact info:
Herschel Grossman
Department of Economics
Box B
Brown University
Providence, RI  02912
Tel: 401/863-2606
Fax: 401/863-1970
AB  - The main objective of this paper is to understand and to evaluate recently expressed popular anxiety about large American fiscal deficits. The paper begins with a discussion of problems involved in measuring the fiscal deficit. A general conclusion is that all interesting measures of the federal fiscal deficit have increased substantially over the past eight presidential terms and are likely to increase further in the near future. The paper goes on to analyze possible connections between fiscal deficits and inflation, economic growth, and fluctuations in the level and composition of economic activity. Important conclusions are that monetary policy, inflation, and aggregate economic activity are all largely independent of the fiscal deficit, but that the fiscal deficit can have major effects on the division of output between consumption and investment. Key elements in the analysis are the effects of taxation on consumption and investment demands and the relations between real and financial developments.
ER  -