Should We Be Concerned about the High Burden of Public Debt? Lessons from the Japanese Case
Brender, Anton
Should We Be Concerned about the High Burden of Public Debt? Lessons from the Japanese Case - 2022.
13
The steady rise in Japanese public debt is regularly a concern. Its role in managing the macroeconomic equilibrium – preventing growth from being stifled by an excess of private saving – is more rarely stressed. As long as private agents continue to want to spend less than they earn and to accumulate debt claims, it is futile to hope for a rapid fall in Japan’s public debt to GDP ratio. Still, the government faces a major challenge: being able to generate budget surpluses tomorrow if private agents decide to spend more than they earn by drawing on the deposits they have accumulated.Classification JEL: H50, H54, H60, H62, H63, H68.
Should We Be Concerned about the High Burden of Public Debt? Lessons from the Japanese Case - 2022.
13
The steady rise in Japanese public debt is regularly a concern. Its role in managing the macroeconomic equilibrium – preventing growth from being stifled by an excess of private saving – is more rarely stressed. As long as private agents continue to want to spend less than they earn and to accumulate debt claims, it is futile to hope for a rapid fall in Japan’s public debt to GDP ratio. Still, the government faces a major challenge: being able to generate budget surpluses tomorrow if private agents decide to spend more than they earn by drawing on the deposits they have accumulated.Classification JEL: H50, H54, H60, H62, H63, H68.
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