Government Purchases vs. Government Spending

I am going to use my blog heavily in teaching my “Principles of Macroeconomics” class this Fall. So I will be posting things I think might be useful for teaching. The link is to a post by Donald Marron that has a great graph of

  1. government purchases (=government spending on goods and services)
  2. total government spending (including transfers and interest on the debt)

as percentages of GDP. That is, it graphs 

  1. G/Y
  2. (G+iB+Transfers)/Y

with the fractions expressed as percentages.


G=government purchases of goods and services

i=nominal interest rate (not adjusted for inflation)

B=government debt (B is a mnemonic for “bonds”)