How Government Debt Accumulates

Posted: 29 Feb 2012

See all articles by Dante Roscini

Dante Roscini

affiliation not provided to SSRN

Jonathan Schlefer

Harvard University - Business School (HBS)

Date Written: April 11, 2011

Abstract

This note discusses the economics of government-debt accumulation. Fiscal deficits are only part of the picture; other factors include the level of debt as a percent of nominal GDP; the interest rate; the inflation rate; the growth rate; and changes in the exchange rate if some debt is owed in a foreign currency. The note discusses how these factors interact to affect government debt levels.

Learning Objective: To teach about the economics of government debt accumulation.

Suggested Citation

Roscini, Dante and Schlefer, Jonathan, How Government Debt Accumulates (April 11, 2011). Harvard Business School BGIE Unit Case No. 711-087, Available at SSRN: https://ssrn.com/abstract=2013344

Dante Roscini (Contact Author)

affiliation not provided to SSRN ( email )

Jonathan Schlefer

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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