On the sustainable deficit of the government
Abstract
In this note we derive the long-run public deficit to GDP ratio that is compatible with a sustainable public debt. Starting from the observation that a sustainable debt policy requires that the present value of public debt asymptotically converges to zero and that the debt to GDP ratio must be constant in the long-run, the deficit to GDP ratio is derived that meets these two conditions.
Fields of Study & Subjects
Fiscal Policies and Political Economy
Fiscal Policy and Economic Growth
Economic and Fiscal Studies
Publication details
- Journal / source
- Publikationen an der Universität Bielefeld (Universität Bielefeld)
- Publication date
- 1 January 2026
- Language
- EN