The Sector Financial Balances Model of Aggregate Demand and Austerity

6 Pages Posted: 10 Jun 2011

See all articles by Scott T. Fullwiler

Scott T. Fullwiler

Wartburg College; Bard College - The Levy Economics Institute

Date Written: June 9, 2011

Abstract

This paper uses the sector financial balances model of aggregate demand to illustrate the effects of fiscal austerity policies on the economy. It further demonstrates that government deficits are not directly controllable by policy makers but are rather endogenous to the responses of the private sector to austerity policies.

Keywords: fiscal policy, government deficits, sector financial balances, aggregate demand, austerity

JEL Classification: E6, H3, H6

Suggested Citation

Fullwiler, Scott T., The Sector Financial Balances Model of Aggregate Demand and Austerity (June 9, 2011). Available at SSRN: https://ssrn.com/abstract=1860625 or http://dx.doi.org/10.2139/ssrn.1860625

Scott T. Fullwiler (Contact Author)

Wartburg College ( email )

222 Ninth St. NW
Waverly, IA 50677
United States

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

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