On the Non-Divergence Condition of the Debt-GDP Ratio Considering Consumption from Assets and Impossibility of Fiscal Collapse with Arguments about Important Misconceptions in Macroeconomics

Yasuhito Tanaka
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Yasuhito Tanaka: Faculty of Economics, Doshisha University, Kyoto, Japan

Financial Economics Letters, 2025, vol. 4, issue 1, 37-47

Abstract: This short note presents a non-divergence condition of the debt-GDP ratio considering consumption from assets, and shows that fiscal collapse is impossible. Also in the supplement (Appendix 3) I present arguments on important misconceptions in macroeconomics about relationship between investment and savings. I will show that investment entities and savings entities are identical and that investment and savings are the same acts.

Keywords: non-divergence condition of the debt-GDP ratio; impossibility of fiscal collapse; consumption from assets; misconceptions in macroeconomics (search for similar items in EconPapers)
Date: 2025
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