Periods of economic growth and economic decline can have a tremendous effect on A budget deficit is caused when a government spends more than it collects in taxes. The results reveal a statistically significant relationship between the country's fiscal deficit and economic growth. "The Effect of Current Account Deficit on Economic Growth: The Case of Turkey," Proceedings of International Academic Conferences 0301828, International Institute of Social and Economic Sciences.Handle: RePEc:sek:iacpro:0301828 The sample taken for the current study comprises of time-series considering period of 1978-2009. If the deficit ratio stays below a critical level, then there are two steady states where capital, output, and public debt grow at the same constant rate. research project submitted in partial fulfilment of the requirements for the award of the degree of master of arts in An empirical analysis of the effects of fiscal deficit on Economic growth in Nigeria. 1.2 Statement of the Problem . ii . in. The budget deficit can not be analyzed autarchically, as it affects all the macroeconomic processes and, is itself influenced by all other macroeconomic indicators. However, the debate about the effects of government budget deficit on economic growth remains unsettled. Deficit spending occurs whenever a government's expenditures exceed its revenues over a fiscal period. However, can we really believe that the fluctuation of the fiscal deficit does not have any effect on growth in Vietnam? This research concentrates on analyzing theoretical and empirical literature reviews to show the effects of budget deficit on economic growth and explaining this effect … 2019) where budget deficit and inflation are explanatory variables and economic growth is the affected variable. The results indicated a positive and significant effect of internal budget deficit financing on economic growth (whereβ= 0.8302; p= 0.03). This research aims at investigating the true impact of the budget deficit on the economic growth of the country. We adopt the approach of examining the effect of changes in the deficit and its two components—spending and revenues—on economic growth, also taking into account the other direction of causality, i.e. JCT found that the economic growth produced by the provision would reduce its effect on the deficit by $13.7 billion over a 10 year period. The sample used for this study is based on panel data-sets between 1994 and 2014. Barro (1979) explored a positive and significant impact of budget deficit on the growth. In this study budget deficit is an independent variable and economic growth is dependent variable. According to the cointegration test, the result has shown that past budget deficit and past Population growth has a negative and effect and that current Trade balance has a positive effect on economic growth in the short run. Comparative Analysis of the Effect of Fiscal Deficit Financing on Economic Growth ABSTRACT. The relationship between budget deficits and macroeconomic variables (such as growth, interest rates, trade deficit, exchange rate, among others) represents one of the most widely debated topics among economists and policy makers in both developed and developing countries. Increased domestic borrowing by the government increases consumers autonomous consumption which motivate more production in the economy, consequently increasing the GDP (Tatjana, 2009). On Tuesday, Minnesota Management and Budget forecast a surplus of $641 million for the FY 2020-21, which ends next June, but a deficit of $1.273 billion for FY 2022-23. It also reported that the macroeconomic growth effects would have resulted in $30.7 billion of deficit reduction if … The government fixes the budget deficit ratio. This paper analyzes the effects of public debt on endogenous growth in an overlapping generations model. This next biennium will be the main focus of the upcoming 2021 legislative session. Adverse impact of fiscal deficit on economic growth has also been shown through its effect on saving and investment in the Indian economy. As we explained on Monday when we launched our new paper Minnesota’s Budget Deficit: Why we should make spending cuts and not … This study examined the comparative analysis of the effect of fiscal deficit financing on economic growth of Nigeria for a period of 34 years (1981-2015) was examined using a time series data. In this regard and along with the experimental studies, the present research investigated the relationship between economic growth and labor productivity and the effect of budget deficit on the economic growth of MENA countries within 2000-2013. iii Budget deficit directs the economy into a ferocious cycle, where deficits result in lower economic growth and in turn lead to lower tax revenue (Ocran, 2011). This is often done intentionally to stimulate the economy. budget deficit on the economic performance of Vietnamese economy in the period 1989-2011, however, their result confirmed that there was no relationship between budget deficit and economic growth. stella osoro . Effects of Fiscal Policy on Economic Growth 499 economic growth [Shabbir and Mahmood (1992); Iqbal (1994, 1995, 1998); Khilji and Mahmood (1997)]. Budget deficit, money supply and inflation have been regarded as some of the important factors on issues relating to economic growth and development in Nigeria. The modeling of underlying variables (Inflation, Gross Domestic Product, Real Interest Rate, Gross Investment, Real Exchange Rate) to estimate the quantitative effect of continued budget deficit on the rate of economic growth, governance and development. The results indicated a negative and significant effect of external budget deficit financing on economic growth (where= −0.9385;= 0.02. The return of substantial budget deficits in the United States has reignited the debate on how budget deficits influence the economy. The study recommends that the government should find ways of enhancing its revenue generation capacity especially by broadening the tax base to reduce the deficit which is financed by internal borrowing. “Consequential Effects of Budget Deficit on Economic Growth of Pakistan”. In economics, a fiscal deficit means the difference between the expenditure incurred and revenue generated by the country in a particular year. Most analyses and studies on public finance and budget balance measure the impact that budgetary deficits accumulation has on economy. ).The study recommends that policies that will promote consecutive borrowing in order to reduce the negative effect of external budget deficit financing on the economy should be adopted.