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A Note on the Real Federal Deficit

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  • Thomas J. Finn

Abstract

Two alternative ways of extracting a measure of the real federal deficit from a measure of the nominal federal debt are discussed. One equates the real federal deficit to the real value of the change in the nominal debt. Aspects of the issues of crowding out, the use of the deficit as an indicator of fiscal policy, and the feasibility of permanent deficits are taken up to show that both measures are important and neither is merely the wrong way to calculate the other.

Suggested Citation

  • Thomas J. Finn, 1988. "A Note on the Real Federal Deficit," Eastern Economic Journal, Eastern Economic Association, vol. 14(3), pages 263-270, Jul-Sep.
  • Handle: RePEc:eej:eeconj:v:14:y:1988:i:3:p:263-270
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume14/V14N3P263_270.pdf
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    References listed on IDEAS

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    1. Michael R. Darby, 1984. "Some pleasant monetarist arithmetic," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 8(Spr).
    2. Milbourne, Ross D & Richards, Daniel J, 1986. "A New View of the Federal Debt and Budget Deficits: Comment," American Economic Review, American Economic Association, vol. 76(5), pages 1154-1155, December.
    3. Hamilton, James D & Flavin, Marjorie A, 1986. "On the Limitations of Government Borrowing: A Framework for EmpiricalTesting," American Economic Review, American Economic Association, vol. 76(4), pages 808-819, September.
    4. Thomas M. Supel & Richard M. Todd, 1984. "Should currency be priced like cars?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 8(Spr).
    5. Dwyer, Gerald P, Jr, 1982. "Inflation and Government Deficits," Economic Inquiry, Western Economic Association International, vol. 20(3), pages 315-329, July.
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