Public Finance and Debt Management

Abstract

It is becoming a commonplace to point to the growing importance of the public sector — defined as including central government, local authorities and nationalised industries — as both a purchaser of goods and services and as a taxer and/or subsidiser of other sectors’ incomes. This activity not only has direct implications for the state of the economy, through effects on aggregate demand, but it also has indirect effects through the manner in which it is financed. The financial implications of past public-sector spending and revenue-raising are of further importance. It is the purpose of this chapter to study these problems.