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Olivier Blanchard

Olivier Blanchard

@olivier-blanchard · 24 positions · 1 change of mind · On ppll ↗

Economist; former chief economist of the International Monetary Fund.

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  1. · held 5 years

    Believed beforesaid

    Our reading

    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.

    Their words thenIf the future is like the past, this implies that debt rollovers—that is, the issuance of debt without a subsequent increase in taxes—may well be feasible. Put bluntly, public debt may have no fiscal cost.

    Nowsaid

    Our readingNo longer believes this.

    Their wordsAcross advanced economies, the celebrated ( r - g ), i.e., the difference between the interest rate and the growth rate, appears to have durably changed sign or, at a minimum, to have gone from a substantially negative number to a number closer to zero.

    ↗If markets are right about long real rates, public debt ratios will increase for some timepiie.com

    public debtinterest rates