Budget deficits are features of over 80 percent of the countries in the world. This book analyses the macroeconomic impacts of these deficits largely with regard to their effects on money supply. It highlights and compares, between the developing and the industrial countries, the characteristics of revenue and expenditure, the various methods of financing budget deficits and their money supply implications, the stabilisation consequences of deficit financing and various issues of monetary control and liberalisation of financial markets. Since the evidence on deficits causing inflation is strongest in the developing countries of the western hemisphere, the emphasis of the analysis and the recommended solutions and reforms address the developing economies. The book analyses the various financial characteristics of developing economies and the features of the revenue and the expenditure sides of budgets to determine the nature and size of deficits. The analysis proceeds by relating budget deficits to their money supply based on various methods of domestic and foreign finance in the industrial and developing worlds. The book then examines the macroeconomic consequences of large increases in money supply and evaluates policies of inflationary finance. The analysis recommends monetary control measures by providing a comprehensive survey on the relationship between monetary policy instruments and money supply in economic development. The last chapter analyses methods for liberalising markets for government securities and examines the experiences of Taiwan and Korea with open-market operations. This book is designed to be useful as supplemental reading for courses in international money and finance, economic development, and topics in macroeconomics, and as a resource for policymakers involved in issues of deficits and monetary policy.