Government Debt

Douglas Elmendorf and N. Gregory Mankiw

No 6470, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper surveys the literature on the macroeconomic effects of government debt. It begins by discussing the data on debt and deficits, including the historical time series, measurement issues, and projections of future fiscal policy. The paper then presents the conventional theory of government debt, which emphasizes aggregate demand in the short run and crowding out in the long run. It next examines the theoretical and empirical debate over the theory of debt neutrality called Ricardian equivalence. Finally, the paper considers the various normative perspectives about how the government should use its ability to borrow.

JEL-codes: E6 H6 (search for similar items in EconPapers)
Date: 1998-03
Note: PE EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published as Handbook of Macroeconomics, Vol. 1, Taylor, J.B. and M. Woodford, eds., Elsevier Science, B.V., 1999, pp. 1615-1699.

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Related works:
Chapter: Government debt (1999)
Working Paper: Government Debt (1999)
Working Paper: Government debt (1998)
Working Paper: Government Debt (1998)
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