Daily Archives: April 23, 2016

Money and Banking Part 13: Balance Sheet Interrelations and the Macroeconomy

By Eric Tymoigne

Past posts have focused on the mechanics of a specific balance sheet, specifically that of the central bank and of private banks. This post looks at the balance-sheet interrelations between the three main macroeconomic sectors of an economy: the domestic private sector, the government sector and the foreign sector. This macro view provides some important insights about issues such as the public debt and deficit, policy goals that are more likely to be achieved, the business cycle, among others.

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