Tag Archives: Dynamic efficiency

NZZ, February 1, 2021. PDF. (Title changed by NZZ.) Do negative interest rates render government debt costless? No. What about r<g? I discuss Olivier Blanchard’s presidential address and the conclusions that columnists have drawn. For background: See this post.

Olivier Blanchard, Public Debt and Low Interest Rates, AER 2019, 109(4). Robert Barro, r Minus g, NBER wp 28002, October 2020. Dmitriy Sergeyev and Neil Mehrotra, Debt Sustainability in a Low Interest World, CEPR dp 15282, September 2020. Stan Olijslagers, Nander de Vette, and Sweder van Wijnbergen, Debt Sustainability when r−g<0: No Free Lunch after All, CEPR dp 15478, November 2020. Ricardo Reis, The Constraint on Public Debt when r<g But g<m, Mimeo, December 2020.