Under this latter scenario, the Fed is not monetizing government debt — it is simply managing the supply of the monetary base in accordance with the goals set by its dual mandate.

Cutting government spending on goods and services increases the budget deficit if the nominal interest rate is close to zero. This is the message of a simple but standard New Keynesian DSGE model calibrated with Bayesian methods. The cut in spending reduces output and thus—holding rates for...

For years, economists have debated the wisdom of increasing government spending during recessions. On the one hand, increased spending adds to budget deficits, but on the other, increased spending can stimulate the economy during a downturn, thus speeding recovery. Deficits topped $1.4 trillion...

Using a sample of the 48 mainland U.S. states for the period 1973-2009, we study the ability of U.S. states to expand their own state employment through the use of state deficit policies. The analysis allows for the facts that U.S. states are part of a wider monetary and economic union with free...

This paper analyses the dynamics of inflation in Bangladesh using vector autoregressive methods over the period from July 1999 to August 2008. Demand side factors are assessed in comparison with cost-push influences with a particular focus on the role of government borrowing from the domestic...

Bangladesh is a developing country in the South Asia. Its illiterate and unskilled large population is a burden to the country. Agriculture is the main source of the income of the country. Government of the country is taking various steps to decrease poverty, but yet about one-third of people of...

Figuring out how to equalize the tax burden across generations is easy. Deciding who's going to pay for it is the hard part.

An examination of two different government forecasts of the five-year federal budget outlook, both of which show persistent large deficits, and a recommendation for additional policy actions in order to achieve annual deficit targets.