Sustainable Fiscal Policy and Interest Rates under Flexible Exchange Rates

摘要: Central to current policy debates regarding public pensions, the appropriate macroeconomic mix, and any number of other issues related growth, development, poverty alleviation, so forth, is concept fiscal sustainability. For neoclassical economists, sustainability analyzed via intertemporal government budget constraint (IGBC). Recently, IGBC has been still more explicitly incorporated into analyses by IMF World Bank internationally in U. S. Social Security/Medicare Trustees Reports Congressional Budget Office (whose director, Peter Orszag, a leading author on from within paradigm). The purpose this paper demonstrate that key assumptions made many applying – most importantly notion interest national debt set private credit markets fact are not applicable governments issuing their own currencies while operating under flexible exchange rates.