Government Debt, Deficits, and Economic Growth: Lessons from Fiscal Arithmetic

Laura Barbosa de Carvalho, Christian Proaño and Lance Taylor

No 2010-02, SCEPA policy note series. from Schwartz Center for Economic Policy Analysis (SCEPA), The New School

Abstract: Economic policy debate in the United States and other developed economies has been dominated by talk of lowering fiscal deficits through spending reductions. Many argue that severe austerity is needed to reestablish fiscal sustainability, economic stability, and growth. The authors however, show that fiscal restraint is not conducive to economic growth out of the recession. The authors argue that spending is needed to spur growth and lower the deficit.

Keywords: Government Debt; Deficits; Growth; Fiscal Policy (search for similar items in EconPapers)
JEL-codes: D63 E21 H2 H30 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2010-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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