This paper elaborates on the relationship between sustainability of public debt and the debt to GDP ratio in case the interest rate on public debt exceeds the growth rate of GDP. When the primary surplus relative to GDP positively reacts to a higher debt to GDP ratio, a bounded debt to GDP ratio...

In a recent paper Minea and Villieu (2009) assert that the 'golden rule of public finance' implies a lower long-run growth rate than the balanced-budget rule. Their contribution is misleading because it is not the 'golden rule of public finance' that generates their result but rather the fact...

We present a monetary endogenous growth model and analyse the effects of fiscal and monetary policy with real money as an argument in the utility function. We show that a balanced government budget gives a higher balanced growth rate and lower inflation than a situation with permanent public...

This paper analyzes the public debt situation in Japan, Germany and the United States by reflecting their respective debt history and by analyzing whether the governments pursue a sustainable debt policy. Starting point of the analysis are theoretical considerations about conditions guaranteeing...