Corporate Restructuring and the Budget Deficit Debate

Martin Wolfson
Additional contact information
Martin Wolfson: University of Notre Dame

Eastern Economic Journal, 1993, vol. 19, issue 4, 495-520

Abstract: This paper examines the assumptions underlying the view that large federal budget deficits crowd out private investment and create a twin trade deficit. These assumptions are contrasted with those of an alternative theory which emphasizes the importance of the institutional structures of the financial system in the context of the credit market. In particular, the paper argues that corporations were not crowded out of credit markets; indeed, they borrowed heavily to finance corporate restructuring (mergers, takeovers, leveraged buyouts, equity repurchases, etc.). This restructuring was encouraged by tax considerations, and the resulting loss of revenue contributed to the budget deficit.

Keywords: Deficit (search for similar items in EconPapers)
JEL-codes: E62 (search for similar items in EconPapers)
Date: 1993
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://web.holycross.edu/RePEc/eej/Archive/Volume19/V19N4P495_520.pdf (application/pdf)

Related works:
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:eej:eeconj:v:19:y:1993:i:4:p:495-520

Access Statistics for this article

Eastern Economic Journal is currently edited by Cynthia A. Bansak, St. Lawrence University and Allan A. Zebedee, Clarkson University

More articles in Eastern Economic Journal from Eastern Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Victor Matheson, College of the Holy Cross ().