Debt can increase economic growth as it allows the households and firms to increase consumption and investment. However, high reliance on debt adversely affects economy as it can cause debt-deflationary recession, balance sheet recession, cyclical fluctuations in economy and decrease in...

Despite the key role an increase in production efficiency plays in improving the competitiveness of the economy, the efficiency of production is not reflected in the objectives of monetary policy. The paper investigates the impact of the interest rate on firms’ efficiency and argues that it is...