<p>Since you already answered yourself I am just filling the textbook recommendation:</p>

<p>You could  find more on this in Blanchard et al. Macroeconomics: an European Perspective. You will find this there (assuming based on the question you are looking something at undergraduate level).</p>

CC BY-SA 4.0
2019-12-20T19:54:29.887Z
2019-12-20T19:54:29.887Z
1muflon1
<p>It's from sectorial balances. 
<a href="https://en.wikipedia.org/wiki/Sectoral_balances" rel="nofollow noreferrer">https://en.wikipedia.org/wiki/Sectoral_balances</a></p>

<p><a href="https://shadowproof.com/2012/03/07/s-i-g-t-x-m/" rel="nofollow noreferrer">https://shadowproof.com/2012/03/07/s-i-g-t-x-m/</a></p>

<p>Although it's quite strange that I can't find it in my macroeconomics textbook. </p>

<p>P.S. It's also worth noting that positive (G-T) represents government deficit, NOT government proficit. Although the formula can be changed to use (T-G) instead.</p>

CC BY-SA 4.0
2019-12-20T14:34:47.120Z
2019-12-20T17:23:38.443Z
2019-12-20T17:23:38.443Z
KarmaPeasant
<p>I saw this formula in following context:</p>
<blockquote>
<p><strong>I want to create Banker State. It's supposed to rely on profit from loans instead of taxes. I would like to keep taxes as low as possible.</strong></p>
<p>Reply: what you're trying to do wouldn't work unless you
were running massive trade surpluses (a la Saudi Arabia). The
government debt represents nongovernment sector equity. (G-T)= -(S-I)
-(X-M) The government fiscal deficit represents the nongovernment sector's net financial savings. Government trying to build positive
debt means forcing the nongovernment sector to go into debt simply
just to pay its tax bill. It doesn't work, it would create vertical
unemployment &amp; the automatic fiscal stabilizers would push the
government fiscal's position (which is reaction to nongovernment
sector spending behavior) into deficit.</p>
</blockquote>

<reference-request>
Where can I read more about formula (G-T)= -(S-I) -(X-M)? And how is this formula called?
KarmaPeasant
# Where can I read more about formula (G-T)= -(S-I) -(X-M)? And how is this formula called?

(Asked by: username_0 on 2019-12-20)

I saw this formula in following context:

> **I want to create Banker State. It's supposed to rely on profit from loans instead of taxes. I would like to keep taxes as low as possible.**
>
> Reply: what you're trying to do wouldn't work unless you
> were running massive trade surpluses (a la Saudi Arabia). The
> government debt represents nongovernment sector equity. (G-T)= -(S-I)
> -(X-M) The government fiscal deficit represents the nongovernment sector's net financial savings. Government trying to build positive
> debt means forcing the nongovernment sector to go into debt simply
> just to pay its tax bill. It doesn't work, it would create vertical
> unemployment & the automatic fiscal stabilizers would push the
> government fiscal's position (which is reaction to nongovernment
> sector spending behavior) into deficit.

**Tags:** reference-request


---

## 2 answers

### Answer by username_1 on 2019-12-20. Score: 1 | Accepted answer

Since you already answered yourself I am just filling the textbook recommendation:

You could find more on this in Blanchard et al. Macroeconomics: an European Perspective. You will find this there (assuming based on the question you are looking something at undergraduate level).


---

### Answer by username_0 on 2019-12-20. Score: 0

It's from sectorial balances.
<https://en.wikipedia.org/wiki/Sectoral_balances>

<https://shadowproof.com/2012/03/07/s-i-g-t-x-m/>

Although it's quite strange that I can't find it in my macroeconomics textbook.

P.S. It's also worth noting that positive (G-T) represents government deficit, NOT government proficit. Although the formula can be changed to use (T-G) instead.


---

