Questions tagged [government-spending]

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Is there any way retirement systems can cope with declining population?

Data show that population in developed countries will start declining by end of this century. Because this is due to low birth rates and aging this will lead to very large imbalance between ...
Ezekiel's user avatar
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1 answer
81 views

Why do governments issue bonds rather than just increasing tax or printing money?

Assuming a government needs to raise money, what are the pros and cons of increasing taxes or printing more money or selling bonds?
JobHunter69's user avatar
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1 answer
40 views

PER CAPITA SPENDING - IS THERE A MODEL?

In 1975 the world population reached 4 billion people. In 2023 it reached 8 billion In 1975 the US population was 211 million. Today it is 340 million. Considering that: 1- we now have more people, ...
Denis Pageau-Sociétalogue's user avatar
0 votes
1 answer
63 views

How much would it realistically cost to give housing to all Americans earning less than 40k per year?

There are certain programs in NYC like CityFHEPs and HUD housing throughout the US for people in a homeless shelter on cash assistance and/or some other conditions, making it possible, but quite ...
Yackov L's user avatar
1 vote
1 answer
126 views

Is there a consensus in economics about public housing?

I'm looking for a meta - analysis / review discussing the question if public housing has a net benefit to the public. EDIT: To be more specific I follow the definition used in the United States where ...
CuriousIndeed's user avatar
0 votes
1 answer
37 views

What is the economically most efficient way to spend on activites which don't produce direct economical gain?

By directly non essential, I mean things like sports, research at public universities etc. How should a government decide how much of the yearly budget to keep for such things? Is there some way to ...
tryst with freedom's user avatar
0 votes
1 answer
29 views

How does debt-financed public infrastructure spending stimulate the economy if money supply is unchanged?

When a national government embarks on public infrastructure projects to stimulate the economy, the money spent on the infrastructure projects increases the money supply. However, if the projects are ...
Flux's user avatar
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1 answer
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''Spending as a Percentage of GDP''

Why is ''XYZ Spending as a Percentage of GDP'' given more importance than XYZ spending as a percentage of the Total Government Expenditure/Budget. For example, i was looking at certain countries ...
Aman's user avatar
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2 votes
1 answer
42 views

Recycling tax revenues

I read a recent policy paper (bottom of page 4, KfW being the German development bank) that asserted that the German government’s spend on subsiding energy efficiency schemes in homes was revenue ...
hmmmm's user avatar
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1 vote
0 answers
108 views

Ramsey model with government

I have a problem with an introduction a government to Ramsey model. For example, there is a capital income tax and government returns the revenue from this tax through lump-sum transfers. What will ...
wtfvba's user avatar
  • 11
0 votes
1 answer
75 views

Where do governments get their loans from?

Do governments get loans from the private banks? Or do they loan directly from the central banking institutes? And how is the interest rate determined for these loans (say for a fixed maturity), is ...
Keep_On_Cruising's user avatar
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0 answers
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Debt sustainability vs dynamics

Im having trouble understand the difference, I have both the equations but still fail the meaning of each. Cant find any source that explains this. Any help or guidance to where I could find it would ...
Imelda's user avatar
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1 vote
1 answer
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Sources for information about Danish general government finances since 2000 (in English)

for a report I have to write about Danish public finances and fiscal policy (budget balance, debt, revenues, expenditures) I'd like detailed information dating back to 2000 or publications giving an ...
Nasan's user avatar
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1 vote
0 answers
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Quarterly GDP and government spending data sources

I am looking for quarterly government spending and GDP data between the years 2019 and 2020 for as many countries as possible. I am posting this question in hopes that someone will point me in the ...
Arturo Sbr's user avatar
0 votes
1 answer
25 views

Why agricultural subsidies were targeted in 1991 Indian Economic Liberalization

In the book Half - Lion: How P.V Narasimha Rao Transformed India, the author mentions that one of the contentious reforms for 1992 were agricultural subsidy reforms. I don't understand how is this ...
Kutsit's user avatar
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1 answer
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Research on the effect of government size on prosperity?

Is there any analysis done to empirically determine the relationship between government size and prosperity of a country? I am not really that familiar with empirical economic research. But it is ...
Borut Flis's user avatar
0 votes
1 answer
71 views

Will interest rates rise if a government runs a huge budget deficit?

My (very simple) logic is this: if government decides to spends a huge amount of money it does not have (meaning that it does not come from taxes) then it will borrow that money and thus create a lot ...
Cristi B's user avatar
  • 113
2 votes
2 answers
296 views

How much revenue could an 100% land value tax be able to generate for the Indian government?

So as a Georgist (follower of Henry George), I believe most form of taxation is immoral and economically inefficient except the land value tax (not to be confused with property taxes) and other ...
user avatar
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Loosely speaking, are all modern economies 'Keynesian' in their stance on spending during downturns?

Keynesian economics is defined as: increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression. Do all modern economies adopt a Keynesian ...
stevec's user avatar
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-2 votes
1 answer
39 views

How did the US Government fund its deficit when the Federal Reserve was pruning its balance sheet in 2018-1019?

The primary way for Governments to fund their deficits is by issuing new currency from the central bank against new treasury bonds. The Federal Reserve reduced its [balance sheet]1 from 4.4 trillion ...
Ritesh Singh's user avatar
0 votes
1 answer
124 views

What are the 'Public Account Liabilities' of the Government of India?

In the Quarterly Report on Public Debt Management for the Quarter Jul - Sep 2020 of the Government of India, an increase in 'Public Debt Liabilities' is declared. What are they?
Ritesh Singh's user avatar
1 vote
1 answer
94 views

What is the public spending / government expenditure share of GDP in Europe?

I have found data that seems to be contradicting: statista gives public spending at country level between 40% and 60%, but eurostat gives an aggregate figure of about 20%, as shown in the following ...
user288227's user avatar
3 votes
2 answers
159 views

Are quantitative easing and helicopter cash really different tactics? And how does QE relate to Modern Monetary Theory?

I've been trying to get a clear understanding of exactly what economists mean by Quantitative Easing (QE). It seems to me that different people mean different things by it. I find simplistic analogies ...
Andrew Kirk's user avatar
2 votes
3 answers
99 views

Why doesn't government work more like a company when it comes to taxes?

In government, the revenue is fixed (most of the time); you don't have to anything extra to get money from your "investors", i.e citizens. Similarly, from a citizens' perspective, whether ...
Our's user avatar
  • 282
1 vote
0 answers
48 views

Why Does Deficit Spending Work Without a Liquidity Trap?

My understanding is that in a functioning economy, the financial market clears when the nominal interest rate is above zero. It is only when it reaches zero that a liquidity trap occurs and the ...
johnsmith13579's user avatar
2 votes
2 answers
144 views

How is the Corona $2 trilion stimulus package going to be financed?

Perhaps this is a simple question but as a non-US citizen I don't understand how the US government is going to finance the $2 trillion stimulus package to combat the economic damage due to the Corona ...
Yunus King's user avatar
1 vote
2 answers
63 views

Dynamic of 10 year UST given supply shock of the bonds that the Fed will buy into

It looks like the US government are gonna issue a lot of bonds in the near future. Basic demand/supply implies that this will lower the price of those bonds i.e higher yields. At the same time it ...
user123124's user avatar
0 votes
0 answers
32 views

What if the government impose both price control and supply restriction on the market?

Due to the virus outbreak, there is a surge in demand for mask and hand sanitizes. To prevent price hiking government impose a price ceiling on the products, however consumers are behaving irrational (...
Anonymous's user avatar
0 votes
1 answer
41 views

on the FRED website where do i find definitions of the variables they give charts of?

eg M3? how can we see precisely how it is defined, measured? https://fred.stlouisfed.org/series/MABMM301USM189S?fbclid=IwAR1lwaCbKUX16L1meOk6iZvloYOW0F7pIjmq9I4sb5VfvhhLhj8lsVTlpxg
Randor's user avatar
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0 answers
37 views

When does increasing government spending lead to economic growth and when does it lead to stagflation?

Obviously increasing government spending endlessly will lead to inflation. What I ask is: when can an increase in government spending, when the economy is in a recession, lead to economic growth ...
Magnus's user avatar
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1 vote
0 answers
24 views

Can we make any general statements about the impact of a single-payer healthcare system on an economy?

The topic of single-payer healthcare is enjoying a moment in the limelight in the US. A significant chunk of the population supports such a system, and more than a few presidential candidates have ...
Oddsee's user avatar
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0 votes
1 answer
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Does Medicaid or Medicare represent a higher risk to the Federal Government Solvency and Debt going forward?

I'm trying to understand not only which program is expected to be larger in terms of costs, but which one has the least capacity to adjust (reduce benefits if revenues for the program fall).
JorgeT's user avatar
  • 101
0 votes
1 answer
51 views

Empirically checking efficiency and equity

I am aware that because of externalities or public goods (or for other reasons) there can be no allocative efficiency on the market. I am also aware that policy makers' subjective judgement of the ...
bajun65537's user avatar
1 vote
1 answer
984 views

Why salaries counted under Government expenditure in GDP

In the expenditure approach of GDP calculation, why are government employee's salary counted under Government approach while for private firms, we don't count salaries. I am unable to understand if ...
Kutsit's user avatar
  • 163
1 vote
3 answers
319 views

When the Central Bank sells a bond, where does the money go ultimately?

As the accepted answer points out, the premise of my question was flawed. Thank you for the dispelling of my wrong assumptions. The original question follows. There are two related questions (and ...
Krastanov's user avatar
  • 155
1 vote
2 answers
81 views

Where do public savings go?

In Mankinw's Macroeconomics, he mentions that public and private savings form national saving, which ends up in the financial sector, which then people and firms use to purchase investment goods. But ...
Vasting's user avatar
  • 381
4 votes
3 answers
231 views

How do government purchases crowd out the private sector?

I am curious about how government purchases crowd out the private sector (if it does). If we look at a graph of the composition of US GDP, it seems that government purchases and investment are ...
Vasting's user avatar
  • 381
3 votes
1 answer
47 views

Military expenditure over time

The following graph from the world bank website shows the world wide military expenditure in percentage of the world GDP over time from 1988 to 2015 I am trying to find similar data over a much ...
Remi.b's user avatar
  • 131
2 votes
1 answer
170 views

How does government spending on imported goods affect GDP?

How does government spending on imported goods affect GDP? Is it first counted as government spending and then subtracted as imports? For instance, if the US government buy a new accounting system ...
MacroClown's user avatar
8 votes
3 answers
234 views

Does immigration help to sustain welfare in rich European countries?

There is a lot of discussions about immigration and its effect on economies lately in Europe, so I'd like to ask a question. Is it true that immigration helps to sustain welfare in rich European ...
DeltaIV's user avatar
  • 213
1 vote
1 answer
515 views

Why does capital initially reduce and then rise with an anticipated future decrease in taxes in the RCK model?

Consider the version of the RCK model where there is a government that runs a constant balanced budget. At $t_0$, the economy is in steady state, with constant tax $T_{old} > 0$ Then, at $...
ahorn's user avatar
  • 1,220
1 vote
2 answers
265 views

Are principal payments on government bonds included in normal budget spending?

If I look, for example, at the UK government's Autumn 2017 budget document the spending piechart has a wedge which says 'net debt interest £41bn'. I notice the wording says 'interest' and not ...
beastofburden's user avatar
3 votes
3 answers
136 views

Do countries have to run on deficits? What is their possible economic future?

Do countries have to run on deficits? Is their future to behave and act like big companies that produce goods and services?
Dr Strangelove's user avatar
2 votes
1 answer
209 views

Can a spending freeze solve the problem of the Italian enormous government debt?

In view of the upcoming Italian general election, I've been reading the program of a party (please let me know in the comments whether I can/should mention its name), and in a section of it they ...
Vincenzo Oliva's user avatar
1 vote
2 answers
181 views

Impact on interest rates of massive government spending

At the last State of the Union address, the President of the United States has reaffirmed his intentions to undertake a massive 1.5 trillion dollar infrastructure spending project over the coming ...
braaterAfrikaaner's user avatar
0 votes
0 answers
479 views

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 ...
user11767's user avatar
  • 651
0 votes
1 answer
886 views

How is reducing government expenditure supposed to reduce aggregate demand?

In my coursebook it says that in a deflationary fiscal policy governments may reduce government expenditure (such as building hospitals and road constructions) to reduce aggregate demand but I don't ...
user15483's user avatar
2 votes
0 answers
64 views

Government spending dynamics

I am currently reading Woodford (2010) and I have understood it for the most part. However, as I am new to solving these kind of models I have a question regarding a specific type of monetary policy ...
Kronecker's user avatar
1 vote
1 answer
537 views

Why can we finance government deficit by having a trade deficit?

I encountered an example question regarding government deficit as follows: $G-T=(S-I)-(X-M)$ where $G$ is government spending, $T$ is net tax (tax minus transfer payment), $S$ is total private ...
user71346's user avatar
  • 111
4 votes
1 answer
164 views

Why did the Greek bailouts "fail" whereas the Portuguese bailouts succeeded?

While Greece has required several bail-outs and is on the brink of falling back into recession, the Portuguese economy has seemingly recovered. Why has recovery gone so well in Portugal but failed ...
Harry de winton's user avatar