Public Debt and Low Interest Rates

  title={Public Debt and Low Interest Rates},
  author={Olivier J. Blanchard},
  journal={Public Economics: National Budget},
This lecture focuses on the costs of public debt when safe interest rates are low. I develop four main arguments. First, I show that the current US situation, in which safe interest rates are expected to remain below growth rates for a long time, is more the historical norm than the exception. If the future is like the past, this implies that debt rollovers, that is the issuance of debt without a later increase in taxes, may well be feasible. Put bluntly, public debt may have no fiscal cost… 
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