<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Why public debts are growing so fast in most developing countries, like a dangerous snowball which is growing and growing and no one can stop it? It is only a negative relation between high debt and real growth of economy? How can we definitively remove the Ricardian anxiety which called debt a “terrible scourge”? These are only few questions asked in the last century in relation with debt “overhang” not only by scholars, but by governments as well. This paper aims to answer to other questions like: Why debt’s rate grows faster than GDP? Why governments borrow? For current spending or for public investments? Who should benefits current loans? Who should pay for them and when? How should be the taxation along the economic cycle: neutral or countercyclical? Need we a model to sustain the public debt over generations, or it is good enough to maintain a good ration between real GDP growth and debt and that’s it?</p></abstract>

Why public debts are growing so fast in most developing countries, like a dangerous snowball which is growing and growing and no one can stop it? It is only a negative relation between high debt and real growth of economy? How can we definitively remove the Ricardian anxiety which called debt a “terrible scourge”? These are only few questions asked in the last century in relation with debt “overhang” not only by scholars, but by governments as well. This paper aims to answer to other questions like: Why debt’s rate grows faster than GDP? Why governments borrow? For current spending or for public investments? Who should benefits current loans? Who should pay for them and when? How should be the taxation along the economic cycle: neutral or countercyclical? Need we a model to sustain the public debt over generations, or it is good enough to maintain a good ration between real GDP growth and debt and that’s it?

How to stop the snowball growth? A way for sustaining public debt over generations

HOLISTICA – Journal of Business and Public Administration

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Why public debts are growing so fast in most developing countries, like a dangerous snowball which is growing and growing and no one can stop it? It is only a...

How to stop the snowball growth? A way for sustaining public debt over generations

Published Online: Sep 09, 2017

Page range: 59 - 68

DOI: https://doi.org/10.1515/hjbpa-2017-0013

Keywords
public debt, sustain, generations, intertemporal

© 2017 Ion-Lucian Catrina, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

How to stop the snowball growth? A way for sustaining public debt over generations

Published Online: Sep 09, 2017

Page range: 59 - 68

DOI: https://doi.org/10.1515/hjbpa-2017-0013

Keywordspublic debt, sustain, generations, intertemporal

© 2017 Ion-Lucian Catrina, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
public debt, sustain, generations, intertemporal