Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174394
Authors: 
Skott, Peter
Year of Publication: 
2016
Series/Report no.: 
Working Paper No. 2016-02
Abstract: 
This paper makes three main points. Fiscal policy, first, may be needed in the long run to maintain full employment and avoid secular stagnation. If fiscal policy is used in this way, second, the long-run debt ratio depends (i) inversely on the rate of growth, (ii) inversely on government consumption, and (iii) directly on the degree of inequality. The analysis, third, suggests that policies and policy debates have been misguided. The recent rediscovery of 'secular stagnation' by Summers and others should be welcomed, but the suggested theoretical redirection is unclear and does not go far enough.
Subjects: 
functional finance
zero lower bound
liquidity trap
fiscal policy
secular stagnation
austerity
public debt
JEL: 
E62
E22
Document Type: 
Working Paper

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