This study develops a theoretical model to examine the impact of central government budget deficits on economic systems. The model addresses the issue from a supply-side perspective. It is shown that the budget deficit can itself he used by governments as a policy tool to influence the level of...

This study uses causality tests to determine the direction of causality between U.S. federal budget deficits and ex ante real long-term interest rates. For the 1971-1991 period, it is found that the ex ante real long-term interest rate may cause the structural budget deficit.

This paper tests the hypothesis that the presence of foreign direct investment (fdi) raises the capital-intensity of technology in the Third World. If this hypothesis is accepted, it may he because multinationals (MNCs) adopt a more capital-intensive technology or because mnc's might tend to...

The empirical results obtained in this study suggest that, in the United States, a rise in the real long-term rate of interest elicits a rise in the federal government budget deficit. This impact of the real long-term interest rate appears to arise because of the negative effect that higher real...