A Goldilocks Theory of Fiscal Deficits

Atif Mian, Ludwig Straub and Amir Sufi

American Economic Review, 2025, vol. 115, issue 12, 4253-91

Abstract: We develop a tractable framework for deficit and debt dynamics. A "free lunch" fiscal deficit—one that raises spending without higher future taxes—is sustainable without zero lower bound (ZLB) only when R

JEL-codes: D31 E23 E43 E62 H62 H63 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/aer.20220308

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