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Dealing with debt

Carmen Reinhart (), Vincent Reinhart and Kenneth Rogoff ()

Journal of International Economics, 2015, vol. 96, issue S1, S43-S55

Abstract: This paper explores the menu of options for renormalizing public debt levels relative to nominal activity in the long run, should governments eventually decide to do so. Although debt ratios may need to rise further in some cases, a vision of longer-term options is key to weighing alternative medium-term stabilization strategies. Orthodox ones, the standard fare of officialdom, include enhancing growth, running primary budget surpluses, and privatizing government assets. Heterodox polices include restructuring debt contracts, generating unexpected inflation, taxing wealth, and repressing private finance. Advanced countries have relied far more on heterodox approaches than many observers choose to remember.

Keywords: Debt overhang; Fiscal policy; Interest rates (search for similar items in EconPapers)
JEL-codes: H63 E43 (search for similar items in EconPapers)
Date: 2015
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