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  • About
  • Knowledge Centre
    • Economic Growth and the Business Cycle
    • Monetary Policy and Inflation
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    • Financial Markets
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Tag Archives: fiscal deficits good

Fiscal Surpluses are Not a Drag on Growth

Taxes and Government SpendingBy Stuart AllsoppNovember 5, 2018Leave a comment

Intro: Just as fiscal deficits do not support growth, fiscal surpluses do not undermine it. In fact, for any given level of government spending, higher taxes, particularly on consumption, can have a positive impact on the economy by raising domestic savings rates, which in turn supports investment and/or improves external balance sheets. There is a…

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