Propensity to budget deficit

The clearly empirical fact in democratic countries that – governments resort to debt before their re-election in order to appeal to certain groups of voters. – Sooner or later, this has an impact on the value of money. – The Stability and Growth Pact originally sought to curb such unsound fiscal policies in the euro area. – See bailout, monetary policy, currency swing, deficit spending, Minhas-Gerais problem, sustainability, nonaffectation principle, policy lag, government debt, debt stimulus. – Cf. ECB Monthly Bulletin, August 2005, pp. 69 f. (deficit propensity growing), pp. 76 f. (options for deficit reduction).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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