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Interest payments and the stability of the government budget deficit in an open and growing economy

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Summary

This article discusses the basic determinants of stability and instability of the accumulation of public debt in an open and growing economy. Unlike most previous studies which start from the basically short term IS-LM framework, this analysis centers on the long-term dynamics arising from the government budget restraint, the balance of payments restraint and the interaction between growth and income distribution. Several policy regimes for the government's budget are taken into consideration and specific attention is paid to the question of whether monetary and fiscal policy can effectively ensure the stability of the system.

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Authors and Affiliations

  1. Department of Economics, University of Amsterdam, Amsterdam, Netherlands

    Casper van Ewijk

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  1. Casper van Ewijk
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Additional information

Comments by W. Driehuis, S.K. Kuipers and H. Thoben are gratefully acknowledged.

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van Ewijk, C. Interest payments and the stability of the government budget deficit in an open and growing economy. De Economist 134, 143–164 (1986). https://doi.org/10.1007/BF01706286

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  • DOI: https://doi.org/10.1007/BF01706286

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