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Can growth stabilize debt? : a fiscal theory perspective

Schmöller, Michaela; McClung, Nigel - 2024 - Updated 14 June 2024

This paper studies price stability and debt sustainability when the real rate exceeds trend growth (r g) in a New Keynesian model with endogenous technology growth through R&D. Endogenous growth constitutes a self-financing mechanism for deficits which backs debt and attenuates fiscal...

Persistent link: https://www.econbiz.de/10015130300

Growth effect of public debt : the role of government effectiveness and trade balance

Butkus, Mindaugas; Seputiene, Janina - In: Economies : open access journal 6 (2018) 4/62, pp. 1-27

A growing number of recent works support the idea of debt threshold level (turning point), above which debt starts reducing economic growth. However, estimated threshold varies sharply across studies and gives a little insight into what the optimal level of debt is. The point is that there is no...

Persistent link: https://www.econbiz.de/10011956426

Fiscal stagnation

Fornaro, Luca; Wolf, Martin - 2025

Persistent link: https://www.econbiz.de/10015409199

Does public debt encourage economic growth? : an application of quantile regressions to panel data for developing countries

Mudayen, Yohanes Maria Vianey; Arsyad, Lincolin; … - In: Economies : open access journal 13 (2025) 4, pp. 1-31

Previous studies on the relationship between government debt and economic growth have produced very diverse findings. This study examines the relationship between public debt and economic growth in developing countries using a quantile regression approach with fixed effects and bootstrapping on...

Persistent link: https://www.econbiz.de/10015409944

Public debt in the "new normal" : a Schumpeterian perspective on fiscal policy

Bofinger, Peter - 2022

's growth theory shows that credit-financed investment, which leads to an innovative use of existing resources, plays a decisive … neoclassical theory, which assigns the state merely the role of a capital destroyer. But it also offers a broader perspective than … that of monetary Keynesian theory, including MMT, in which government debt is seen to serve only to produce full employment …

Persistent link: https://www.econbiz.de/10013466735

Optimal public debt threshold for Nepal

Prasai, Laxmi Prasad - 2024

Persistent link: https://www.econbiz.de/10015061820

Growth promotion policies when taxes cannot be raised

Minami, Katsunori; Horii, Ryo - 2024 - Preliminary: September 2024

This paper examines the effect of growth-enhancing policies in an R&D-based endogenous growth model when the government does not have the ability to raise taxes to finance the required expenses. We show that the government can increase the economic growth rate by debt-financed R&D subsidies...

Persistent link: https://www.econbiz.de/10015066887

Good debt or bad debt?

Tamborini, Roberto - 2024

The public debt overhang spread across advanced countries, and the reform of the Stability and Growth Pact in the Euro Zone, have revived the polarization between those who think that debt is always good and those who think that debt is always bad. This paper presents a normative model of...

Persistent link: https://www.econbiz.de/10015133886

Education versus infrastructure: is there a trade-off in an open economy with perfect capital mobility?

Konopczyński, Michał - In: Contemporary economics 18 (2024) 3, pp. 280-300

We present an open economy growth model incorporating various elements of fiscal policy, including government expenditure on education and public capital (infrastructure), budget deficit, internal and external public debt, public consumption, and four tax rates. This detailed description of...

Persistent link: https://www.econbiz.de/10015189601

Fiscal stagnation

Fornaro, Luca; Wolf, Martin - 2025

Persistent link: https://www.econbiz.de/10015395087