The budget deficit and macroeconomic performance

"Since the 1980s, when budget deficits widened in many countries all over the world, governments face the problem of how to reduce the deficit while maintaining growth and keeping inflation and trade deficits under control. Analysing this crucial question for India with the help of a multi-period real-financial CGE model with portfolio choice, this study goes beyond earlier modelling approaches in a number of ways. Focusing on credit rather than money as the crucial financial variable, an explicit description is given of the link between the budget and the credit creation process. Offering a framework which integrates real and financial markets, the book recognizes the dual role of credit in financing both working capital and investment." "The book is rich in empirical and analytical content and will be of value to post-graduate students, teachers and researchers of macroeconomics and development economics and to policy-makers in developing countries."--BOOK JACKET.