The Social ‘Burden’ of High Interest Rates

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Abstract

Pasinetti proves that Domar's 1944 article is indeed correct. Domar's well-known article, created a stir by arguing that not only a high level of public debt, but also a continuous growth of public debt, and thus persistent deficit spending, could be sustainable, provided that a vigorous process of economic growth were maintained. His arguments came down to something that sounds almost obvious today: whereas in a stationary economy continuous growth of the public debt is impossible, as it inevitably, leads to an explosive situation, in a steadily growing economy, the public debt can indeed grow indefinitely, provided that-its rate of growth is kept within the constraints of the rate of growth of the national product. Their ratio can thereby remain'stable indefmitely.
Lingua originaleEnglish
Titolo della pubblicazione ospiteCapital Controversy, Post-Keynesian Economics and the History of Economic Thought, Essays in Honor of Goeffrey Harcourt. vol.I
EditorPhilip Arestis, Gabriel Palma, Malcolm Sawyer
Pagine161-168
Numero di pagine8
Stato di pubblicazionePubblicato - 1997

Keywords

  • Comparative dynamics
  • Domar
  • High public debt

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