ABSTRACT
The budget, financially speaking, is the heart of the Austrian policy mix. Its liquidity chamber supplies and revitalizes the money supply, easing pressure on the banks; its demand chamber, by reducing investment risks, eases the burden on the economy—a constant flow of profits and lower debt requirements. The inclusion of the foreign money and credit markets in the internal financing process eased the domestic money and credit markets. For domestic demand and money flowed out, not in, via the balance-of-payments deficit. Fiscal debt management bore on internal financing directly through its impact on the changes in the money volume, and indirectly via its influence on the debt level of the banking economy and the resultant interest-rate structure. However, the Austrian banking community did not exactly rush to grant the economy credit or extend loans. In Austria, the upward trend of the real-capital formation was neither restricted by the relatively weak capital market nor blocked by public deficits.
