Utilize este identificador para referenciar este registo: http://hdl.handle.net/10071/34322
Autoria: Leão, E. R.
Leão, P. R.
Data: 2025
Título próprio: The effect of government spending on the debt-to-GDP ratio in the medium term
Título da revista: International Economics and Economic Policy
Volume: 22
Número: 2
Referência bibliográfica: Leão, E. R., & Leão, P. R. (2025). The effect of government spending on the debt-to-GDP ratio in the medium term. International Economics and Economic Policy, 22(2), Article 31. https://doi.org/10.1007/s10368-025-00656-w
ISSN: 1612-4804
DOI (Digital Object Identifier): 10.1007/s10368-025-00656-w
Palavras-chave: Fiscal policy
US New Deal
US fiscal stimulus of 2009–2010
European fiscal consolidation
Economic dynamics
Paradox of investment
Resumo: Using the dynamic model proposed by Leão and Leão (2024), this paper argues that, in an economy situated below full employment, an increase in government spending may reduce the debt-to-GDP ratio in the medium term. The reason is the following one. Through the so-called “paradox of investment”, a fiscal stimulus triggers a multi-year process of mutually fed increases in the rate of utilization of productive capacity and in private investment. Specifically, a fiscal stimulus increases output and utilization, and this leads firms to raise investment. But this increase in investment generates less productive capacity than demand and, therefore, provokes a paradoxical and further rise in utilization. This in turn leads to even more investment, and so on—the result being a sustained path of output growth. This will in turn have an impact on public finances. After having deteriorated initially as a result of the fiscal stimulus, the budget balance and the path of public debt will start to improve, and this, coupled with the sustained output growth, may end up reducing the debt-to-GDP ratio in the medium term. The theoretical argument just presented is then used to elucidate the results of the US New Deal of the 1930 s, of the European fiscal consolidation of the early 2010 s, and of the US fiscal stimulus of 2009–2010.
Arbitragem científica: yes
Acesso: Acesso Aberto
Aparece nas coleções:CEI-RI - Artigos em revista científica internacional com arbitragem científica

Ficheiros deste registo:
Ficheiro TamanhoFormato 
article_111158.pdf1,17 MBAdobe PDFVer/Abrir


FacebookTwitterDeliciousLinkedInDiggGoogle BookmarksMySpaceOrkut
Formato BibTex mendeley Endnote Logotipo do DeGóis Logotipo do Orcid 

Todos os registos no repositório estão protegidos por leis de copyright, com todos os direitos reservados.