Essays in Monetary Economics (Collected Works of Harry Johnson)

CHAPTER VIII

FISCAL POLICY AND THE BALANCE OF PAYMENTS IN A GROWING ECONOMY*

I.  INTRODUCTION

Any attempt to discuss the relation between fiscal policy and external economic relations as a separate aspect of governmental financial policy for economic development necessarily involves a somewhat severe abstraction, since for the purpose of analysing the growth process and the contribution that fiscal policy may make to it, economic relations with the rest of the world ought to be regarded merely as an extension of domestic economic activity. Concentration on the balance of payments as the aspect of external economic relations with which fiscal policy ...