Garga, Vaishali - 2020 - This version: April 2020
to raise the natural real interest rate. This paper builds a non-Ricardian framework to study the tradeoffs associated … with a debtfinanced fiscal expansion and show that even in a low real interest rate environment, higher debt doesn …’t necessarily raise the real interest rate. The effect of the expansion is non-monotonic: Increasing debt raises the natural real …