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← The lower a country's neutral interest rate, the smaller the fiscal…

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8 connected korrents · 4 moments on record from 11 Feb 2019 to 21 Aug 2026.

Same subjectSame subjectSame subjectSame subjectSame subjectSame subjectSame subjectSame subject The lower a country'sneutral interest rate, thesmaller the fiscal and… OB Olivier Blanchard — holds since 2022-06-01 When safe interest rates are expected to remain below growth rates for a long time, rolling over public debt without later tax increases is feasible and public debt may carry no fiscal cost. When safe interestrates are expected to… OB Olivier Blanchard — holds since 2019-02-11 OB Olivier Blanchard — turned since 2023-11-06 During post-2008 fiscal consolidation, the costs of high public debt were overestimated and fiscal multipliers were underestimated, understating the output costs of austerity. During post-2008 fiscalconsolidation, the… OB Olivier Blanchard — holds since 2022-06-01 The main obstacle to sound fiscal policy debate is a widespread, quasi-religious belief that public debt is inherently bad. The main obstacle tosound fiscal policy… OB Olivier Blanchard — holds since 2022-06-01 A central bank can eliminate a self-fulfilling ('sunspot') debt crisis simply by credibly committing to buy as many bonds as needed at the low interest rate. A central bank caneliminate a… OB Olivier Blanchard — holds since 2022-06-01 A fiscal expansion when the economy is already at potential output prompts monetary tightening that dampens or eliminates its effect on output. A fiscal expansion whenthe economy is already… OB Olivier Blanchard — holds since 2022-06-01 A government's debt dynamics are a household's or a company's, except that it can print money and tax -- and those two powers are what change the ending. A government's debtdynamics are a… RD Ray Dalio — holds since 2026-08-21 A longer average debt maturity protects a government from temporary interest-rate spikes and gives it more time to adjust to permanent rate increases. A longer average debtmaturity protects a… OB Olivier Blanchard — holds since 2022-06-01 A persistently low safe interest rate signals that capital is not very productive at the margin, an underlying economic problem rather than a policy variable. A persistently low safeinterest rate signals… OB Olivier Blanchard — holds since 2022-06-01
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