The Sustainability of Budget Deficits in a Stochastic Economy

Bohn, Henning
February 1995
Journal of Money, Credit & Banking (Ohio State University Press);Feb95, Vol. 27 Issue 1, p257
Academic Journal
The article presents an examination into research on the sustainability of the U.S. fiscal policy in light of budget deficits. Criticism and extensions to previous empirical modeling are provided, outlining a stochastic model to integrate dynamic efficiency methods to calculate interest rates and discounting behaviors. A general government budget equation is modeled, utilizing a simple general equilibrium paradigm which then derives transversality conditions and intertemporal budget constraints. Commentary is also offered outlining the model's application to the U.S. system.


Related Articles

  • The Economic Consequences of Mr. Clinton. Levine, Robert A. // Atlantic;Jul96, Vol. 278 Issue 1, p60 

    The article examines the economic logic and history of U.S. President Bill Clinton's budget policy. According to the article, with zero inflation as the central goal of economic policy, the U.S. is on a dangerous path that is comparable to the stagnation of the British economy before the Great...

  • HOW BILL CAN BLOW IT.  // New Republic;4/26/93, Vol. 208 Issue 17, p7 

    Asserts that the success of U.S. President Bill Clinton's deficit reduction program can be assess through the long-term interest rates. Reflection of the program's success and the medium of its influence; Correlation between lower interest rates and increase in investments; Investors' attitudes...

  • The bill of particulars. Hage, David; Collins, Sara // U.S. News & World Report;3/1/93, Vol. 114 Issue 8, p20 

    Discusses how President Bill Clinton's economic program to drive down the deficit and restore long-term prosperity might well work. What most Americans like about Clinton's program; Reflection of his roots as a New Democrat; Falling interest rates, the linchpin of his new growth strategy;...

  • Rubinomics Redux. Chait, Jonathan; Samuelson, Robert J. // New Republic;5/24/2004, Vol. 230 Issue 19, p21 

    This section presents a refutation of views expressed by economist Robert Samuelson on the impact of federal budget deficits on the U.S. economy, followed by a reply from Samuelson. One of the more bizarre rhetorical strategies employed by economic conservatives in recent years has been to tar...

  • And you thought the campaign was long. Miller, Mark // Newsweek;1/18/1993, Vol. 121 Issue 3, p25 

    States that last week President-elect Bill Clinton gave his first hint of what he actually planned to do about the economy. Clinton's aides privately admitted that Clinton would not be able to honor hs campaign promise to cut the federal deficit in half of his term; Clintonites knew long ago...

  • The poisoned chalice revisited. Bethell, Tom // American Spectator;Sep93, Vol. 26 Issue 9, p16 

    Looks at United States President Bill Clinton's proposed deficit reduction program. Purpose of phrase `deficit reduction'; Clinton plan as an exercise in deception with news media as collaborators; Failure to publish totals; Journalists who are critical of the plan; Plan's similarity to Bush's...

  • The ghost of government future? Dentzer, Susan // U.S. News & World Report;11/27/95, Vol. 119 Issue 21, p41 

    Opinion. Questions whether Americans are really prepared for less government as debate rages over balancing the budget. Excellent economic reasons to banish the budget deficit; Public response to lower federal spending which remains unclear; Concern over cuts in so-called nondefense...

  • A New Democrat? Burns, John W.; Taylor, Andrew J. // Independent Review;Winter2001, Vol. 5 Issue 3, p387 

    Deals with economic policy initiatives of the administration of United States President Bill Clinton. Failed bid to reform the nation's health-care system; Clinton's claim of being a New Democrat; Advocacy of positions more conservative than those adopted by previous Democratic presidents;...

  • When It Comes to Tax Cuts, Washington Is Thinking Small. Birnbaum, Jeffrey H. // Fortune;4/12/1999, Vol. 139 Issue 7, p184 

    Discusses a possible tax cut in the United States in 1999. Why it is the perfect time for a tax cut; Why any revenue measure passed will be minimal; Criticism of the government's economic policy; Selected tax cuts that will be the focus of debate, including marriage penalty, estate taxes,...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics