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A Behavioural Model of Government Budget Deficits

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  • Van Velthoven, Ben C J
  • Van Winden, Frans A A M

Abstract

This paper stresses the need for a behavioral-theoretic explanation of budget deficits. From that perspective, the existing literature is evaluated. Using Frans A. A. M. Van Winden's interest function approach, a formal model is developed in which government expenditure, the tax rate, and the budget deficit are simultaneously determined. Using this model, the paper analyzes the impact on budget deficits of the preferences of different social groups; the social power configuration; the time horizon of the state; the interest rate; and the time pattern of national income.

Suggested Citation

  • Van Velthoven, Ben C J & Van Winden, Frans A A M, 1990. "A Behavioural Model of Government Budget Deficits," Public Finance = Finances publiques, , vol. 45(1), pages 128-161.
    • Handle: RePEc:pfi:pubfin:v:45:y:1990:i:1:p:128-61
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    Cited by:

    1. Darby, Julia & Li, Chol-Won & Muscatelli, V. Anton, 2004. "Political uncertainty, public expenditure and growth," European Journal of Political Economy, Elsevier, vol. 20(1), pages 153-179, March.

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