.Second, even without fiscal costs, public debt reduces capital accumulation and may therefore have welfare costs. However, welfare … costs may be smaller than typically assumed. The reason is that the safe rate is the risk-adjusted rate of return on capital …. A safe rate that is lower than the growth rate indicates that the risk-adjusted rate of return to capital is in fact low …

Second, even in the absence of fiscal costs, public debt reduces capital accumulation, and may therefore have welfare …-adjusted rate of return to capital. If it is lower than the growth rate, it indicates that the risk-adjusted rate of return to … capital is in fact low. The average risky rate however also plays a role. I show how both the average risky rate and the …

cost.Second, even in the absence of fiscal costs, public debt reduces capital accumulation, and may therefore have welfare …-adjusted rate of return to capital. If it is lower than the growth rate, it indicates that the risk-adjusted rate of return to … capital is in fact low. The average risky rate however also plays a role. I show how both the average risky rate and the …