# Consolidated budget constraint

This is an excerpt from a data source that I am using. According to the authors it has been created from accounting identities such that it matches theoretical variables used in macroeconomics.

For example, they state that the consolidated government constraint is:

$T_t + S_t + \Delta B_t^p = G_t +I_t + i_t B_{t-1}^p$

Where $T_t$ is tax revenue, $S_t$ is seigniorage, $B_t^p$ is government debt owned by the public, $G_t + I_t$ is government spending on consumption and investments and $i_t B_{t-1}^p$ is interest payments to the public. This is inline with government constraints I have seen in textbooks. However, when I use their data, I cannot seem to get correct numbers.

For example, consider $t = 1802$:

$T_t = 9844$, $S_t =813$, $G_t + I_t = 7096$, $i_t B_{t-1}^p = 1083$, $\Delta B_{t}^p = 23406 - 22243$ and clearly the number do not add up.

However, when I calculate the consolidated deficit ($G_t +I_t + i_t B_{t-1}^p -(T_t + S_t))$ I get something very similar to $DEF_t^c$.

So I am quite confused as to what I am doing wrong. My only guess is that it has to do with the timing notation. I.e $\Delta B_{t}^p \neq B_{t}^p - B_{t-1}^p$. Any ideas on what I am doing wrong?

• I cant see the data excerpt. can you link the picture again? – EconJohn Dec 29 '17 at 17:42
• Sorry about that. Imgur wasn't working a couple of minutes ago so I used an alternative unloading website. I have updated it now, hopefully it works fine. – BenBernke Dec 29 '17 at 17:45