SOAS Research Online

A Free Database of the Latest Research by SOAS Academics and PhD Students

[skip to content]

Toporowski, Jan (2020) 'Debt Management and the Fiscal Balance.' Review of Political Economy, 32 (4). pp. 596-603.

Text - Accepted Version
Download (248kB) | Preview


This paper presents a method for integrating debt management into fiscal policy using principles derived from the work of Kalecki. It proposes dividing the government budget into a functional budget containing taxes and expenditure that may affect expenditures in the non-financial economy, and a financial budget containing taxes on wealth and higher incomes that do not affect expenditures in the real economy but do affect the liquidity of wealth portfolios. This gives the government two more or less independent instruments to manage economic growth and government debt. The respective balances between the functional and financial budgets then affect the fiscal multiplier showing how cases of expansionary fiscal contraction, contractionary fiscal expansion, expansionary financial instability, and deflationary financial instability may arise. The analysis applies to domestically financed debt.

Item Type: Journal Article
SOAS Departments & Centres: Departments and Subunits > Department of Economics
ISSN: 09538259
Copyright Statement: This is an Accepted Manuscript of an article published by Taylor & Francis in Review of Political Economy on 17 Dec 2020, available online:
DOI (Digital Object Identifier):
Date Deposited: 16 Nov 2020 08:23

Altmetric Data


Download activity - last 12 monthsShow export options
Downloads since deposit
6 month trend
6 month trend
Accesses by country - last 12 monthsShow export options
Accesses by referrer - last 12 monthsShow export options

Repository staff only

Edit Item Edit Item