The prevailing view of the economic consequences of financing government deficits, as reflected in the recent economics literature and in recent public policy debates, reflects serious misunderstandings. Debt-financed deficits need not "crowd out" any private investment, and may even "crowd in"...

The prevailing view of the economic consequences of financing government deficits, as reflected in the recent economics literature and in recent public policy debates, reflects serious misunderstandings. Debt-financed deficits need not "crowd out" any private investment, and may even "crowd in"...

This paper begins by examining the persistence of movements in the U.S. Government%u2019s budget posture. Deficits display considerable persistence, and debt levels (relative to GDP) even more so. Further, the degree of persistence depends on what gives rise to budget deficits in the first...

In the absence of major policy changes, federal government budget deficits will probably constitute a serious impediment to any increase inthe U.S. economy's net investment rate, and may even depress the investment rate still further, during the latter 1980s. The U.S. Government's outstanding...

In the absence of major policy changes, federal government budget deficits will probably constitute a serious impediment to any increase inthe U.S. economy's net investment rate, and may even depress the investment rate still further, during the latter 1980s. The U.S. Government's outstanding...

The paper next reviews recent evidence on the impact of changes in government debt levels (again, relative to GDP) on interest rates. The recent literature, focusing on expected future debt levels and expected real interest rates, indicates impacts that are large in the context of actual...