Tag Archives: Fiscal Sustainability 101

Money is No Object

Money is No Object

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Fiscal Sustainability 101 – Part 3d

Understanding why governments issue debt The fundamental principles that arise in a fiat monetary system are as follows. The central bank sets the short-term interest rate based on its policy aspirations. Government spending is independent of borrowing which the latter … Continue reading

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Fiscal Sustainability 101 – Part 3c

Understanding why governments tax In a fiat monetary system the currency has no intrinsic worth. Further the government has no intrinsic financial constraint. Once we realise that government spending is not revenue-constrained then we have to analyse the functions of … Continue reading

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Fiscal Sustainability 101 – Part 3b

Understanding the monetary environment Any notion of fiscal sustainability has to be related to intrinsic nature of the monetary system that the government is operating within. It makes no sense to comment on the behaviour of a government in a … Continue reading

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Fiscal Sustainability 101 – Part 3a

In this blog I will complete my analysis of the concept of fiscal sustainability by bringing together the discussion developed in Part 1 and Part 2 into some general principles. The aim is to provide a blueprint to cut through … Continue reading

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