The U.S. Public Debt: Implications for Growth

Carlos Asilis

No 1994/004, IMF Working Papers from International Monetary Fund

Abstract: The increase in the U.S. public debt over the past twelve years raises questions about its implications for investment and economic growth. This paper places these developments within an international and historical context and quantitatively examines the implications of various measures of the current U.S. public debt-to-GDP ratio on economic growth. The analysis is undertaken through extensions of recently developed endogenous growth models. The results suggest that while higher levels of the public debt may affect long-run economic growth negatively, the order of magnitude is not large enough to be a cause for serious concern.

Keywords: WP; GDP ratio; GDP; interest rate; physical capital; growth discussion; General government net debt; economic growth rate; effect calculation; net debt figure; Human capital; Current account deficits; Government debt management (search for similar items in EconPapers)
Pages: 36
Date: 1994-01-01
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