With r-g near zero, any advanced economy running a primary deficit will see its debt-to-GDP ratio rise once existing debt is refinanced at current rates.

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• 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. OBOlivier Blanchard11 Feb 2019
• Higher real interest rates reflect a more optimistic collective view of future economic abundance. BHByrne Hobart12 Sept 2026
• There is no universal debt-to-GDP threshold beyond which government debt becomes unsustainable; sustainability depends on factors like the real interest rate. OBOlivier Blanchard1 Jun 2022
• A longer average debt maturity protects a government from temporary interest-rate spikes and gives it more time to adjust to permanent rate increases. OBOlivier Blanchard1 Jun 2022
• Raising interest rates cannot meaningfully cool inflation when structural fiscal deficits, not private-sector lending, are its main driver. LALyn Alden8 Jan 2025

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