The Measurement and Significance of the Cyclically Adjusted Federal Budget and Debt

New measures of the cyclically adjusted federal budget and debt are summarized, and the relationship between the measures and macroeconomic variables since the early 1960s are examined. It is shown that while debt may have a positive effect on capital stock, the ratio of capital to real output shoul...

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Bibliographic Details
Published in:Journal of money, credit and banking credit and banking, 1985-05, Vol.17 (2), p.232-242
Main Authors: De Leeuw, Frank, Holloway, Thomas M.
Format: Article
Language:English
Subjects:
Analysis
Budget (united States)
Budgets
Capital stocks
Cycles
Cyclical deficit
Cyclically adjusted budget
Deficit financing
Economic policy
Economic theory
Economic trends
Expenditures
Federal budget deficit
Federal budgets
Fiscal policy
GNP
Government spending policy
Gross National Product
Impacts
Interest rates
Macroeconomics
Monetary base
Monetary policy
Money, Credit, and Banking Lecture
National debt
Predictions
Public debt
Public debts
Ratios
Regression analysis
Studies
Citations: Items that cite this one
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Summary:New measures of the cyclically adjusted federal budget and debt are summarized, and the relationship between the measures and macroeconomic variables since the early 1960s are examined. It is shown that while debt may have a positive effect on capital stock, the ratio of capital to real output should be negatively related to the ratio of government debt to nominal income. A strong negative relationship is confirmed by the regression results, with the debt-to-GNP ratio moving from falling to flat to rising as the capital stock-GNP ratio shifts from rising to flat to falling.
ISSN:0022-2879
1538-4616
DOI:10.2307/1992336