Bill Mitchell — Twin Deficits and Sustainability Of Budget Deficits – Part 1

I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to publish the text sometime early in 2014. Comments are always welcome. Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it.

 

Today I am writing about Section 25.2.

Chapter 25 Recent Policy Debates

In this Chapter we consider the following policy debates:
▪ 25.1: Ageing, Social Security, and the Intergenerational Debate
▪ 25.2: Twin Deficits and Sustainability Of Budget Deficits
▪ 25.3: Fixed Versus Flexible Exchange Rates: Optimal Currency Areas, the Bancor, or Floating Rates?
▪ 25.4: Economic Growth: Demand or Supply Constrained?
▪ 25.5: Environmental Sustainability and Economic Growth

25.2 The twin deficits hypothesis

Bill Mitchell – billy blog
Twin Deficits and Sustainability Of Budget Deficits – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia