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Deficits in sentence

2171 examples of Deficits in a sentence

Unfortunately, several eurozone countries allowed fiscal deficits to grow in good times, rather than only when demand was weak.
In other words, these countries’ national debt grew because of “structural” as well as “cyclical” budget deficits.
Structural budget deficits were facilitated over the past decade by eurozone interest rates’ surprising lack of responsiveness to national differences in fiscal policy and debt levels.
The heads of member states’ governments agreed in principle to limit future fiscal deficits by seeking constitutional changes in their countries that would ensure balanced budgets.
Specifically, they agreed to cap annual “structural” budget deficits at 0.5% of GDP, with penalties imposed on countries whose total fiscal deficits exceeded 3% of GDP – a limit that would include both structural and cyclical deficits, thus effectively limiting cyclical deficits to 3% of GDP.
An important part of the deficit agreement in December is that member states may run cyclical deficits that exceed 0.5% of GDP – an important tool for offsetting declines in demand.
And it is unclear whether the penalties for total deficits that exceed 3% of GDP would be painful enough for countries to sacrifice greater countercyclical fiscal stimulus.
It would be much smarter to focus on the difference between cyclical and structural deficits, and to allow deficits that result from automatic stabilizers.
The ECB should be the arbiter of that distinction, publishing estimates of cyclical and structural deficits.
That analysis should also recognize the distinction between real (inflation-adjusted) deficits and the nominal deficit increase that would result if higher inflation caused sovereign borrowing costs to rise.
Italy, Spain, and France all have deficits that exceed 3% of GDP.
But these are not structural deficits, and financial markets would be better informed and reassured if the ECB indicated the size of the real structural deficits and showed that they are now declining.
For a decade now, the world economy has suffered from tremendous global imbalances: massive external surpluses in countries like China, Japan, Germany, Switzerland, and the oil producers, matched by equally large external deficits in the US, the United Kingdom, Spain, and others.
Still-troubled financial systems and huge fiscal deficits are keeping the West’s deficit countries (especially the US) from expanding domestic demand.
As Markus K. Brunnermeier, Harold James, and Jean-Pierre Landau explain, Germany has become the champion of a rules-based system that emphasizes keeping deficits low and generally prohibits bailing out debtors.
If the US wants to reduce its own deficits, it should start saving more.
As we now know, much of the growth in financial assets prior to the crisis reflected leverage of the financial sector itself, and some of the growth in cross-border flows reflected governments tapping global capital pools to fund chronic budget deficits.
Moreover, given aging populations and low productivity growth, potential output is likely to be eroded in the absence of more aggressive structural reforms to boost competitiveness, leaving the private sector no reason to finance chronic current-account deficits.
Economists have to go back to the nineteenth-century United States to find a similar textbook example of successful growth, with large current-account deficits financed mainly through foreign direct investment.
Lax financing conditions may prevail for quite a long time, but, sooner or later, growing external and fiscal deficits become unsustainable; confidence evaporates and investors flee, taking their liquidity with them.
These countries must now engineer substantial real wage and price deflation in order to regain competitiveness and reduce their trade deficits.
Thus, if reform on the eurozone’s periphery succeeds, both these economies and core countries will suffer from decreasing aggregate demand; if reform fails, either the deficits will continue to be financed, leading to further accumulation of external debt, or the entire eurozone will fall into depression, with sovereign debtors eventually defaulting on their liabilities.
Remarkably, America’s hegemony grew in this second post-war phase, in parallel with its trade and budget deficits.
But to keep financing these deficits, bankers had to be unleashed from their New Deal and Bretton Woods restraints.
Only then would they encourage and manage the inward capital flows needed to finance America’s twin fiscal and current-account deficits.
Rather than helping Greece to overcome its crisis, the austerity policies pursued since May 2010 have plunged it into a deep recession that perpetuates fiscal deficits and aggravates financial uncertainty.
Fiscal deficits were reduced.
They also have to keep their fiscal deficits below certain ceilings.
“Structural” budget deficits would be limited to 0.5% of GDP, with (as yet undisclosed) penalties for violators.
The periphery needs to recover competitiveness, and some have taken heart from the Mediterranean countries’ shrinking trade deficits – the structural trade imbalances within the eurozone are correcting themselves, they say.
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