For almost twenty years, Pakistan's fiscal deficit, at about 7 percent of GNP, averaged nearly twice the level for Asian countries as a whole. This paper examines the causes of Pakistan's fiscal deficits. The authors examine why, despite these deficits, the country's macroeconomic performance...

Tax or debt financing of a given rate of government expenditures would, according to the well-known Ricardian equivalence proposition, have equivalent effects on aggregate demand. Among the sources of a deviation from equivalence is the possibility that the government and the private sector have...

A small macroeconomic model based on familiar theoretical considerations is developed and estimated using data from 31 developing countries. Efficient estimation techniques are used to control for country heterogeneity under the assumption of rational expectations. The estimates and the test...