Cyclically adjusted budget deficit
Cyclically adjusted budget deficit is the budget deficit adjusted for the influence of the business cycle on government spending and tax revenue; the budget deficit that would occur if the economy's production and employment were at their natural levels. Also called full-employment budget deficit.
Definition
According to Macroeconomics by Mankiw (7th edition),
- Cyclically adjusted budget deficit. The budget deficit adjusted for the influence of the business cycle on government spending and tax revenue; the budget deficit that would occur if the economy's production and employment were at their natural levels. Also called full-employment budget deficit.