Deficit financing in developing countries: Applications and consequences
Zubair Hasan
MPRA Paper from University Library of Munich, Germany
Abstract:
Budgetary deficits and adverse external payments have emerged as major public policy concerns in recent times. The purpose of this paper is to discuss briefly various aspects and forms of deficit financing as modern economies increasingly use it to address these concerns. Historical evidence shows that controlled deficit finance can be a useful tool to mobilize physical resources for economic development. Borrowings from the IMF are available to meet deficits during financial turmoil and chronic balance of payments deficits for country bailout. The paper warns of the dangers of reckless indulgence in deficit financing, internal or external - and indicates precautions to avoid the pitfalls. It puts, presumably for the first time deficit finance for various purposes from different sources in a single framework.
Keywords: Deficit financing, Economic development; International Monetary Fund (IMF) conditionality; Arms race (search for similar items in EconPapers)
JEL-codes: H3 (search for similar items in EconPapers)
Date: 2019-01, Revised 2019-02
References: Add references at CitEc
Citations:
Published in Journal of Islamic Banking and Finance Karachi Jan-Mar 2019 No. 1.36(2019): pp. 9-21
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/94349/1/MPRA_paper_94349.pdf original version (application/pdf)
Related works:
Working Paper: Deficit financing in developing countries: Applications and consequences (2019)
Working Paper: Deficit financing in developing countries: Application and consequences (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:94349
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter (winter@lmu.de).