The Macroeconomics of Financing Government Expenditure

This book surveys the main issues relating to the static macroeconomic consequences of the government budget constraint, that is, the effect of alternative sources of financing government expenditure on macroeconomic variables such as inflation, exchange rates, interest rates, naturial output, private savings and investment.

Government expenditure is constrained by available sources of finance, broadly divided into internal and external sources.

The study advocates a judicious balance between the alternative sources for the financing mix to be both adequate and consistent with macroeconomic stability.