Monthly Archives: September 2010

Budget surpluses are not national saving

As a matter of accounting between the government and non-government sectors, a government budget deficit adds net financial assets (adding to non government savings) available to the private sector and a budget surplus has the opposite effect. The last point … Continue reading

Posted in LayPerson | Tagged | 2 Comments

The Myth of Crowding Out

This is the final blog post of the Deficit Spending 101 series, it immediately follows the Central Bank Role blog. We now know that it is a myth to perpetuate the idea that a currency-issuing government is financially constrained. This … Continue reading

Posted in LayPerson | Tagged , | 4 Comments

Central Bank Role

This blog follows directly from “Deficit Spending 101 – Part 3”. The central bank operations aim to manage the liquidity in the  banking system such that short-term interest rates match the official  targets which define the current monetary policy stance. … Continue reading

Posted in LayPerson | Tagged , | Leave a comment

Deficit Spending 101 – Part 3

This is Part 3 in Deficits 101, which is a series I am writing to help explain why we should not fear deficits. In this blog we consider the impacts on budget deficits on the banking system to dispel the … Continue reading

Posted in LayPerson | Tagged , | Leave a comment