Fiscal Policy in West Germany: Anticyclical Versus Expenditure-Reducing Policies

N. Kloten and K. H. Ketterer

Chapter Chapter 14 in Controlling Industrial Economies, 1983, pp 291-307 from Palgrave Macmillan

Abstract: Abstract Fiscal policy is in a dilemma in the Federal Republic of Germany. Net borrowing by central, regional and local authorities (Federal Government, Länder governments and local authorities) amounted to approximately DM 77 billion in 1981 (1) — the highest new borrowing by the public sector in the history of the Federal Republic. The high debts and particularly the rapid increase in new public sector borrowing since 1977 have caused great anxiety in West Germany. Evidence of this is the fear of many of a possible government bankruptcy or the need to carry out yet another currency reform, although there is absolutely no objective reason for this. However, even scientifically based analyses, as for instance those carried out by the German Council of Economic Experts, show that it is essential to decrease the public sector deficit in order to restore a satisfactory rate of real growth of the economy emanating from the private sector.

Keywords: Local Authority; Federal Republic; Fiscal Policy; Budget Deficit; Government Budget (search for similar items in EconPapers)
Date: 1983
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DOI: 10.1007/978-1-349-06340-6_14

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