debt remain a function of the dynamics of the primary budget deficit. As a way to study their joint behavior, we endogenize … a structural deficit in the form of an underfunded social-security scheme. We define debt capacity as the level of debt … the deficit cannot be financed. In several realistic scenarios occurring in economies, we calculate the needed policy …

Is deficit finance, explicit or implicit, free when borrowing rates are routinely lower than growth rates? Specifically … provide no convincing basis for using deficit finance to redistribute from young and future generations or other countries …

Deficit finance is free when the growth rate routinely exceeds the government's borrowing rate. Or so many people say … can lower the government borrowing rate, encouraging yet more inefficient deficit finance …

perpetually below the economic growth rate. Given an equilibrium with a public debt bubble, the primary deficit and the level of … transfers. There is no upper bound on the deficit level or long-run debt level that is sustainable in equilibrium. In a public … rise to a larger debt and primary deficit …