We build a simple theoretical model, representing two countries participating in a monetary union, to analysis the cases in which it is efficient to limit public sector deficits (to implement the Stability Pact). We introduce a link between the levels of public debt and the common interest rate,...

It has been observed, in a number of european countries like France, that the increase in real long term interest rates seemd to imply a decrease in the corporate debt ratios (the debt to equity ratio or the debt to value added ratio) and also a decrease in th share of wages in value-added. We...