Acharya, Viral V.; Rajan, Raghuram Govind; Shim, Jack - National Bureau of Economic Research - 2022
We examine the dynamics of a country's growth, consumption, and sovereign debt, assuming that the government is myopic … in a "growth boost", with higher steady-state household consumption than if it could not borrow. However, in a country … "growth trap" where household steady-state consumption is lower than if the government had no access to debt. We discuss the …