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Public Debt and the Limits of Fiscal Policy to Increase Economic Growth

Research that seeks to estimate the effects of fiscal policies on economic growth has ignored therole of public debt in this relationship. This study proposes a theoretical model of endogenous growth,which demonstrates that the level of the public debt-to-gross domestic product (GDP) ratio shouldnegatively impact the effect of fiscal policy on growth. This occurs because…

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Public Debt and Price Stability

Modernized Austrian capital theory implies: in capital market equilibriumwithout public debt the average period of production equals the average waiting period of households. In the twenty-first century and for the OECD plus China area, demo- graphic and production parameters are such that capital market equilibrium implies anegative real rate of interest. Price stability implies a…

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