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Achievement of financial-economic equilibrium of economic system with double deficits

Journal: Scientific review, Науковий огляд, Научное обозрение (Vol.4, No. 57)

Publication Date:

Authors : ;

Page : 26-48

Keywords : shutdown; fiscal policy; external effects; foreign economic relations; GDP; domestic national product; the poverty line; minimal salary;

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Traditional look at the problem of state debt, which is shared by the majority of the economists and confirmed by the world practice of state finance regulations, states that the state budget deficit leads to the decrease of the level of national savings and investment, and also to the appearance of trade balance deficit. In the Long-term period, existence of state debt causes inflation as far as money emission for the state income increase equals introduction of the inflation tax, decreases stationary capital volume, under which investment equals amortization, external debt increases, devalvation of national currency continues. Volume of shadow economy increases, problems related to occurence and accumulation of new harmful or useful external effects the latter are uncompensated expenses or benefits of one of the parties who is not involved in the production or consumption of a certain product.

Last modified: 2019-07-01 20:47:57