Single-equation estimates of fiscal reaction functions, which relate primary surpluses to past debt-GDP ratios and … behavior. Biases arise from failure to model the general equilibrium relationships between government debt and surpluses …, relationships that bring in the forward-looking nature of nominal debt valuation and the role of monetary policy in that valuation …

where taxes and spending no longer adjust to stabilize debt. In such economies, monetary policy may lose its ability to …

debt, as well as through their income, their mix of assets, their liabilities, and their own solvency. This paper inspects … constraint. It discusses five channels: (i) how inflation can (and cannot) lower the real burden of the public debt, (ii) how … seignorage is generated and subject to what constraints, (iii) whether central bank liabilities should count as public debt, (iv …

The European Central Bank is unique in setting monetary policy for several sovereign states with heterogeneous debt …

If the U.S. is on a fiscally sustainable path, then higher U.S. government debt/output ratios should reliably predict … future cash flows nor discount rates account for the variation in the current debt/output ratio. Instead, the future debt …

In a deterministic overlapping-generations economy with production and physical capital, the price of debt can be … positive without any budget surpluses being in the offing, because debt incorporates a rational bubble. Yet the dynamics of … debt remain a function of the dynamics of the primary budget deficit. As a way to study their joint behavior, we endogenize …

This paper proposes a tractable framework to analyze fiscal space and the dynamics of government debt, with a possibly … binding zero lower bound (ZLB) constraint. Without the ZLB, a greater primary deficit unambiguously raises debt. However, debt … need not explode: When R < G - φ, where φ is the sensitivity of R - G to debt, a modest permanent increase in the deficit …

short-run savings effects. In practice, periods of debt accumulation such as …