Abstract
This chapter presents the government budget constraint and analyzes several issues based on this accounting framework. Section 10.1 shows that the government budget constraint results from the consolidation of the Treasury and Central Bank balance sheets. Section 10.2 presents the conditions for the public debt to be sustainable. Section 10.3 addresses the inflation tax and the various alternative ways to calculate its social cost. Section 10.4 covers various hyperinflation models. Section 10.5 presents the Ricardian equivalence theorem. Section 10.6 deals with the fiscal theory of the price level. Section 10.7 analyzes the conditions for a monetary regime to be sustainable.
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Barbosa, F.d.H. (2018). Government Budget Constraint. In: Macroeconomic Theory. Springer, Cham. https://doi.org/10.1007/978-3-319-92132-7_10
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DOI: https://doi.org/10.1007/978-3-319-92132-7_10
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Publisher Name: Springer, Cham
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Online ISBN: 978-3-319-92132-7
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