deficit spending Archives - Page 3 of 3

Government Spending and Inflation. Part 6

By John Lounsbury March 26, 2023macroeconomics2 Comments

Note: This was posted at 4:24 pm on March 26 with some incomplete sections. Updating in was completed at 2:52 am March 28.

In previous parts of this discussion, we have made some qualitative observations about relationships involving the correlations between U.S. federal government spending and inflation in the U.S. economy. For the first time in this series, we will move into the arena of quantitative measurements of government spending and inflation correlations.

Credit: Photo by Mahdi Soheili on Unsplash

Government Spending and Inflation. Part 5

By John Lounsbury March 12, 2023macroeconomics5 Comments

We have previously¹ used the CPI data available since 1913 to create annualized inflation data aligned with the federal fiscal years from 1914 to 2022.In this post, we use the timeline-matched data to examine leads or lags that may exist between the two variables – government spending and inflation.

Credit: Photo by Ann H from Pexels

Government Spending and Inflation. Part 4

By John Lounsbury March 5, 2023macroeconomics4 Comments

In previous posts on this topic,^1,2,3 we have looked at the historical records of inflation and deficit spending by the U.S. federal government. The changing dates for the government’s fiscal year over the country’s history confounded the correlation analysis of that data. Since 1913, U.S. inflation data has been recorded monthly. In this post, we will use the data since 1913 to align the timelines of the two variables.

Credit: Foto-RaBe⁴ from Pixabay

Government Spending and Inflation. Part 3

By John Lounsbury February 26, 2023macroeconomics2 Comments

This post examines the question: which comes first, US federal government deficit spending or inflation?

Credit: Image by Taken from Pixabay¹

Government Spending and Inflation. Part 2

By John Lounsbury February 19, 2023macroeconomics2 Comments

This post will address how data sampling affects the analysis results for correlations between U.S. deficit spending and inflation. In Part 1¹of this series, it was seen that there is significant variability in this correlation over time. It is essential to know whether that variability is affected by changing the data sampling structure. If changes are connected to data treatment, care must be taken to ensure conclusions are fundamental to the overall data and not an artifact of how it is organized.

Image credit: Gerd Altmann from Pixabay²

Government Spending and Inflation. Part 1, Expanded

By John Lounsbury February 11, 2023macroeconomics2 Comments

“Inflation is always and everywhere a monetary phenomenon.”
. – – Milton Friedman¹

Nobel laureate Milton Friedman is considered to be the father of monetarism. This macroeconomic theory enjoyed popularity in the late 20th century but has come under increased criticism in the 21st century. Monetary theory is deeply linked to arguments about the causes of inflation. As shown here, there is little data to support Friedman’s theory that government spending generally causes inflation. The issue is not as simple as he made it seem.

Milton Friedman, age 77, 1989. Credit: Encyclopedia Britannica.