To summarize, the point of the above analysis is that the financial sector as a whole cannot achieve this on its own. It takes a federal government to not only affect demand in all regions but also keep their debts in check. The workings of finances of a federal government affects the asset and liability positions of any region as a whole. The financial sector cannot take up the task of a federal government.The Case of Concerted Action
Federal Government And Regional Balance Of Payments
Ramanan
"but also keep their debts in check."
ReplyDeleteRam what mechanism do you see for this?
imo the federal institution does this by sustaining growth in incomes via growth in govt purchases and growth in xfer payments.... this "keeps debts in check" by creating the additional income to service additional debts...
rsp,