We build and estimate a novel TANK model with partially unfunded debt to study whether the record high debt-to-GDP ratio threatens US inflation stability. In response to business cycle shocks, the monetary authority controls inflation, and the fiscal authority stabilizes debt. The central bank...

1. Introduction. A distinctive proponent of classical political economy in the Spanish-speaking world -- 2. The Absolutism six-year Period (1814-1820). Encountering Smith and Say -- 3. The Liberal Triennium (1820-1823). Mora, Bentham and radical liberalism -- 4. London (1824-1827). The approach...

This paper examines equilibrium determination under different monetary policy regimes when the government might default on its debt. We apply a cash-in-advance model where the government does not have access to non-distortionary taxation and does not account for initial outstanding debt when it...

This paper uses cross country regression analysis on a large set of countries to consider two hypotheses. The first is that increased public debt as a percentage of the economy reduces confidence in financial institutions. The second is that increased public debt relative to the economy lowers...

In studies concluding that public debt may hamper GDP, the debt tipping effects are estimated as if there were a single world currency. This means that such studies ignore the likely biggest cause of changes in growth rates, namely damage from exchange rate liquidity shocks because we do not...

100 years after Böhm-Bawerks death and nearly 70 years after Keynes has died there is still fundamental controversy about the factors which determine the interest rate in the long run. While Economists in the Austrian tradition see it as solely driven by real phenomena, Keynesian authors mainly...