Budget Deficits and Economic Activity in Asia

Following an examination of current levels of government budget deficits and current fiscal policies in Asian economies, this study turns to a quantification of the effects on money supply, inflation, aggregate demand and interest rates.
The growth and persistence of government budget deficits is causing increasing concern in both developed and developing countries. After testing for the feasibility of the current levels of budget deficits and therefore of the current fiscal policies in Asian economies, the author turns to a quantification of the effects on money supply, inflation, aggregate demand and interest rates.