New answers tagged government-debt
1
The issue is that they did not had much other choice as the war and war reparations made German hyperinflation virtually inevitable.
As given by quantity theory of money a price level, change in which gives you inflation, is given by:
$$P = \frac{MV}{Y}$$
so the change in price level $P$ depends not just on quantity of money $M$, but also velocity $V$ and ...
4
Government can have savings while having deficit because we are just talking about savings not net savings.
For example, imagine that government has zero tax revenue $\\\$10$ spending and $\\\$10$ of public investment. In this case the government is running deficit of $\\\$20$ yet it is also saving through investment. Due to the deficit being larger than ...
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