Schulden dulden, Kredit genießen: zur Beständigkeit und Bedeutung von Budgetdefiziten

Fritz Helmedag

Wirtschaftsdienst, 2015, vol. 95, issue 5, 347-349

Abstract: Referring to an allegedly “classical Keynesian model”, Hans-Werner Sinn wants to prove with mathematical rigor that credit-financed government expenditures always exceed the induced increase in tax revenues. Apparently, the remaining deficits accumulate over time. As a consequence, debts are supposed to grow both absolutely and in relation to the national product beyond all limits. These statements rest on a dubious causal analysis and an inadequate definition of the relevant multiplier. Rather, tax rates above a certain minimum yield fiscal revenues greater than the initial deficit. Besides, the debt-to-GDP ratio does not necessarily converge to infinity even if the state’s liabilities rise steadily. Copyright ZBW and Springer-Verlag Berlin Heidelberg 2015

Keywords: E62; H62; H63 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s10273-015-1830-y

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