Theoretical Effects of Government Funding Through Central Bank Money Creation
DOI:
https://doi.org/10.47611/jsrhs.v12i4.5391Keywords:
Theoretical, Expenditure, Funding, Economics, Central Bank, Money, CreationAbstract
The primary objective of this essay is to present an analysis of the effects of the implementation of the government policy described in the title, in which government expenditures are funded by money newly created by the central bank. The analysis is firmly grounded on modern economic theory and models, backed up by statistics from authentic sources, and based on historical events replicating a similar situation; it draws economic concepts from the Keynesian school of thought, is supported by government data, and references the period of hyperinflation in Weimar Germany in 1921. The essay emphasizes the less obvious existence of short term advantages while breaking down the more obvious long term disadvantages as a consequence of the implementation of the aforementioned government policy. Clear definitions of ambiguous terms and vocabulary are provided.
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