TY  - JOUR
AU  - Blanchard,Olivier J.
TI  - Current and Anticipated Deficits, Interest Rates and Economic Activity
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1265
PY  - 1984
Y2  - 1984
UR  - http://www.nber.org/papers/w1265
L1  - http://www.nber.org/papers/w1265.pdf
N1  - Author contact info:
Olivier J. Blanchard
International Monetary Fund
Economic Counsellor and Director
Research Department
700 19th Street, NW
Rm. 10-700
Washington DC, 20431
Tel: 202-623-7825
Fax: 202-623-7271
E-Mail: blanchar@mit.edu
M1  - published as Olivier J. Blanchard. "Current and Anticipated Deficits, Interest Rates and Economic Activity," in Georges de Ménil and Robert J. Gordon, editors, "International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics" Elsevier Science Publishers B.V., 1991 (1991)

AB  - There is widespread feeling that current deficits, in Europe and the U.S.,may hurt rather than help the recovery. This paper examines some of the issues involved, through a sequence of three models.The first model focuses on sustainability and characterizes its determinants. It suggests that the issue of sustainability may indeed ber elevant in some countries.The second model focuses on the effects of fiscal policy on real interestrates, and in particular on the relative importance of the level of deficits andthe level of debt in determining interest rates.The third model focuses on the effects of fiscal policy on the speed of the recovery. It shows how a sharply increasing fiscal expansion might be initially contractionary rather than expansionary.
ER  -