StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

The politics of deficits, surpluses, borrowing and debt - Essay Example

Comments (0) Cite this document
Summary
According to Beck et al (2001, p.2), much of the work done in monetary economics indicates that well-functioning financial intermediaries and markets promote long-run economic growth. They further that particular legal codes, contract enforcement mechanisms, and information…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.7% of users find it useful
The politics of deficits, surpluses, borrowing and debt
Read TextPreview

Extract of sample "The politics of deficits, surpluses, borrowing and debt"

Download file to see previous pages A diverse empirical literature is provided by research based on industry level-data [Rajan and Zingales 1998; Wurgler 2000], time-series research [Neusser and Kugler 1998; Rousseau and Wachtel 1998, 2000], and econometric investigations that use panel techniques [Beck, Levine, and Loayza, 2000] supports the view that financial systems are essential for economic growth. While a strong relationship exists how sound and well-functioning financial markets impact economic growth, Beck et al raise a critical question: ‘How did some countries develop well-functioning financial systems, while others did not? Why do some countries have particular laws and enforcement mechanisms that support the operation of free, competitive financial markets, while others do not?’ (2001, p.2). Particularly, why do some countries post huge budget surplus amounts while other states suffer prolonged effects of massive budget deficits?
According to Petersen (1999), governments face the fundamental issue of using credit and raising funds in the present that will be repaid in the future with interest, a cost just like any other economic choice. Governments usually borrow in order to finance deficits (easier than to raise taxes), stabilize the economy in the short term and invest in productive infrastructure and economy upskilling in the long-term. Foreign borrowing allows a country to invest and consume beyond the limits of current domestic production and, in effect, finance capital formation not only by mobilizing domestic savings but also by tapping savings from capital surplus countries (Narayanan 2002). Petersen notes that national governments face more options in this regard because it has control over the money supply as well as the operation of the banking system and credit markets than its local counterparts but argues that the more open that national economies have developed, “the more even those options are curbed by the workings of the international economy” ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The politics of deficits, surpluses, borrowing and debt Essay - 1”, n.d.)
The politics of deficits, surpluses, borrowing and debt Essay - 1. Retrieved from https://studentshare.org/miscellaneous/1537005-the-politics-of-deficits-surpluses-borrowing-and-debt
(The Politics of Deficits, Surpluses, Borrowing and Debt Essay - 1)
The Politics of Deficits, Surpluses, Borrowing and Debt Essay - 1. https://studentshare.org/miscellaneous/1537005-the-politics-of-deficits-surpluses-borrowing-and-debt.
“The Politics of Deficits, Surpluses, Borrowing and Debt Essay - 1”, n.d. https://studentshare.org/miscellaneous/1537005-the-politics-of-deficits-surpluses-borrowing-and-debt.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF The politics of deficits, surpluses, borrowing and debt

Protectionism, Gains from Trade, and Trade Balance Deficits and Surpluses

...?Protectionism, Gains from Trade, and Trade Balance Deficits and Surpluses Trade is the most important feature of the modern world. It basically means international purchases of goods and services. There can arise deficit or surplus (when exports are higher than imports) or deficit (when imports are higher than exports) in the trade balance of any country. There are several gains from trade that an open economy can obtain. There are also some protectionist policies that are sometimes adapted by governments. This paper discusses and analyses all these aspects in the context of the US economy and impacts of fiscal and monetary policies on the US economy in the context of these discussions. Explanations of concepts: Protectionism, an economic...
4 Pages(1000 words)Essay

Twin Deficits

... of evading financial deterioration. If a lender observes that, the debtors have a more spending habit than their potential to refund the money, then it remains a high possibility that the creditor will charge increased charges to reflect the raised threat related with that debt. The same is correct for a nation (Mankiw, 2012). The US Twin Deficit Experience Beginning from the 1980s (during the era of Reagan Administration), the US had high trade and budget deficits. The budget deficit had remained about $50 to $75 billion during the end of 1970s and increased to more than $200 billion in 1983. The current account or trade deficit remained about zero throughout the start of 1980s, however, went past $100 billion in 1985. A few scholars had...
6 Pages(1500 words)Research Paper

Government Fiscal Policy/Budget Deficits and the National Debt

... as the federal government injects more money into the economy. In addition, reduction in household income taxes could be attributed to an increase in budget deficit. Additionally, fiscal policies may have caused an increase in both local and foreign debt because; the federal government could borrow from private sectors by asking local banks to sell bonds to them. On the contrary, foreign debts increases as the government obtain funds from institutions such as International monetary funds and World Bank (Devereux, Choi, Devereux & International Monetary Fund, 2005). Students Responses In order to address recessionary problem, the government should have employed both fiscal and monetary policy tools. Secondly, federal government should try...
3 Pages(750 words)Assignment

Consumer Borrowing

ASSIGNMENT Roles and functions of Financial s and Markets: Households, Individuals, Businesses and Governments require funds to fulfill their needs of additional finance. These households, businesses, financial institutions and financial markets together form what is known as the Financial System. In simple words, we can define financial system as a process through funds are transferred efficiently from lenders (savers) to borrowers (users) of money. Savers (people, businesses, entities and government) are those with extra funds. For a variety of reasons, they choose not to spend all of their current income so they have a surplus of funds. On the other hand, there are users whose spending needs exceed their current income levels s...
2 Pages(500 words)Essay

Government Deficits and Public Debt

...Introduction Governments across the globe formulate budgets on how they are going to handle the needs of their general population. It is common practice among the countries to formulate annual budgets on how they are going to spend their funds. In seeking to have funds for their projects, governments sometimes in cur debts to enable it to fund its public projects. This government debt is a collection of IOUs issued and is outstanding. This occurs when the governments borrows from the general public. The deficit in this case is addition to the amount of debt owed by the government in a specific period. But the reverse is a negative deficit where the outstanding government debt falls. This negative deficit is referred to as a surplus...
5 Pages(1250 words)Term Paper

Main Ideas of the Politics of Representation

The reason for phenomenon is that art is not static, but rather interactive with its audience and the political and social ideas of the audience’s present as well as the symbols inherent in the particular forms used. The postmodern movement, with its emphasis on illuminating the sublime, brings these ideas to the forefront. “The political and the aesthetic are inseparable, simultaneously present, faces of the postmodern problematic” (Burgin, 1982). On examining the main ideas within the politics of representation I will draw on various philosophical ideas in relation to recent art practices and consider the topical question of visual representation as an instrument of control and power.
Any creative ide...
6 Pages(1500 words)Essay

Are Social Timing Deficits More Pronounced In People With Atypical Diagnosis Of Autism

It is a severe developmental disorder that affects the way a child sees and interacts with the rest of the world. It limits their ability to interact with others socially and most of the times try to avoid human contact. It is also a part of a large group of disorders called pervasive developmental disorders (PDD) (Autism-PDD.net, 2005).

In 1908, Eugen Bleuler a Swiss psychiatrist coined the word "autism" in schizophrenic patients who screened themselves off and were self-absorbed. Leo Kanner while at Johns Hopkins first identified autism in 1943 when he described 11 self-absorbed children who had following common traits: impairments in social interaction anguish for changes, good memory, belated echolalia, over se...
11 Pages(2750 words)Case Study

Problems in Australian Politics and How to Solve Them

Wages that include overtime allowances and travel allowances for the staff of Members of Parliament reveal a sudden increase just before the elections and this reveals that they are being utilized as a part of the election campaign (McLennan, 2004).

Estimating corruption is always difficult because people never reveal the facts of corruption that they are involved in. Politicizing public service often becomes a major problem and this reprehensible practice was introduced during the regime of the Labour party government and was continued by the Coalition government. Due to this, the public servants have slowly commenced to divest themselves of accountability towards parliament or to the code of conduct (McLennan, 2004).<...
6 Pages(1500 words)Assignment

Order in World Politics

Though theoretically, the term international relations are the product of the eighteenth century, when renowned English philosopher and jurist Jeremy Bentham applied it in his works, yet in practice, it is as old as the history of the human state system itself. It is fact beyond doubt that the interaction among individuals belonging to other states has been in vogue since ever and the people had been tied up in social, economic, cultural and political ties outside their country. Looking into the history of the world at large, it becomes evident that the relations between the states existed in ancient Greek, Roman, Chinese, Egyptian and Indian civilizations too, though specific laws had not been introduced by any of these countries...
15 Pages(3750 words)Assignment

S&T Debt Factors

The agreement contains a credit default contracts that include credit default swaps, default index contracts, credit default options, and credit default basket options. One can use these as part of the mechanism that is collateralized by debt obligations. The goal should be to establish a price for a given risk and controlling credit based on risk. The credit can be allowed by minimization of risk. Credit controllers should develop versatile tools that transfer risk away from a lender’s balance sheet.
d) With reference to the proposed debt counseling business, illustrate and explain exactly how you would organize the debt counseling operation, taking particular care to explain how and when you would receive payment for...
6 Pages(1500 words)Case Study

The Role Played by Cultural Difference in International Politics

The discourse of multiculturalism is inconsistent. To its advantages belongs preservation of cultural pluralism, recognition, and protection of the diverse minority, refusal from xenophobia, chauvinism, and racial prejudices. Lacks are shown in ethnisation of social relations, the institutionalization of cultural distinctions, ignoring the liberal principle of priority of the rights of an individual.

The culture of any nation, defining its spiritual uniqueness, expressing its creative power and abilities, simultaneously is a property of all mankind. “According to official multiculturalism, no individual is forced to retain his or her culture, but all cultures are granted a universal right to celebrate and even to...
9 Pages(2250 words)Essay

Religion and Politics in Russia

Centuries have passed since the times' religious organizations, such as a church or various loges formed on the basis of certain religious views, ruled the Old World. The whole history world history gives bright and endless examples of the fact that through the development of civilization religious beliefs were not only a part of a nation’s culture, but were also a powerful tool of politics which enabled kings and emperors to keep a country in peace, and people appeasable. The earliest historical examples, such as ‘Akhenatens new religion’ (http://www.geocities.com/), which was introduced to the nation in order to unify it around one god, show that religion was always not only to support and enhance the culture o...
10 Pages(2500 words)Coursework

Women in American Politics: Past and Future Challenges

The official political role of women in the colonial period was not definite at all. Political rights were founded profoundly on ascribed status such as birthrights and on achieved status such as property. Religion also contributed in determining who could and could not play a part in politics. There was no steady and widespread difficulty in the participation of women in political life, yet only a small number of women voted in England and North American colonies, and hardly any women participated in politics to the degree of putting into effect political influence (ibid). In reality, the minority had any public office at all in England, and no women can be recognized as holding elective political office in the colonies.
It...
19 Pages(4750 words)Research Proposal

The Politics of Looking Relations in Films

The book by Frantz Fanon title ‘Black Skin, White Masks’ deals with the social revolution that brews in the minds of the oppressed. (Markmann, 1967). In this regard, films are a medium and an art form rolled into one. They have the capacity to transport viewers and put across messages that can transform the lives of entire audiences. The power of cinema is one that has been hailed as the hardest hitting of art forms, even from the days of silent movies. The term or phrase, ‘Motion Pictures’ is literally the most accurate definition of the most powerful element of cinema. Moving pictures are the most powerful form of expression in art. This art form called cinema relies on the use of pictures that move in or...
8 Pages(2000 words)Term Paper

Contemporary Issues in World of Politics Climate Change Policy

It is more than a particular problem of any specific community. In fact, climate change has a wider global nature compared to other environmental issues and it affects the people of every nation and boundary. Therefore, the issue of climate change has a far wider reach than the other environmental issues and it is an issue concerned with almost all the international communities. It is identifiable that national boundaries may attempt to prevent the movement of people and goods across the boundaries of the nation. However, when it comes to pertinent environmental issues such as climate change, these issues do not stop at borders, making them – some would argue – quintessentially global phenomena. “Climate change i...
6 Pages(1500 words)Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic The politics of deficits, surpluses, borrowing and debt for FREE!

Contact Us