The Effects of Federal Government Deficits and Debt

1. INTRODUCTION 1
2. THEORY 3
11 CLASSICAL MODEL 3
2.2 SOURCES AND USES OF DISPOSABLE INCOME 5
13 INVESTMENT 6
14 EFFECTS OF A GOVERNMENT DEFICIT 8
15 INTEREST RATES AND INFLATION 9
16 THE RICARDIAN EQUIVALENCE THEOREM 10
3. EMPIRICAL INVESTIGATION 13
3.1 DESCRIPTION OF ROBERT BARRO'S CONSUMPTION MODEL 13
3.2 SOURCES OF DATA 16
3.3 REGRESSION RESULTS OF BARRO AND OF PRESENT STUDY 23
3.4 EFFECTS OF DEFICIT ON REGRESSION VARIABLES 25
3.5 ADDITION OF THE STOCK OF OUTSTANDING GOVERNMENT DEBT 27
3.6 INCLUSION OF FEDERAL AND NONFEDERAL DEFICITS AND DEBT 33
4. CONCLUSIONS 36
references 37