Thursday, October 8, 2020

Furman on debt sustainability

Jason Furman gave a presentation at Peterson Institute today titled Global Economic Prospects, focusing on COVID-19 and labor markets. He covers the fiscal response and non-response, labor market policy debates, and the future of fiscal policy. Here are the slides on fiscal policy, a nice overview:

Note- the primary balance needed to stabilize the debt (slide 27) is derived from the formula primary balance = (i - g) / (1+g) * prior period debt. I think he's assuming g = 0.

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