Long-Term Budget Deficits: Economic Effects and Potential Responses

May 20–21, 2027 — Washington, DC

The US federal government is currently running large structural budget deficits, and projections by the Congressional Budget Office and other analysts suggest that, unless policies are changed, federal debt could exceed 150 percent of GDP by mid-century. Record peace-time primary deficits during the global financial crisis and the COVID-19 pandemic resulted in sharp increases in the debt-to-GDP ratio. Rising real interest rates, coupled with historically high debt levels, are boosting federal interest payments relative to GDP.

The prospective path of US debt and deficits has drawn research attention to the consequences of persistent structural deficits as well as possible responses to them. To promote such research, the National Bureau of Economic Research (NBER), with the generous support of the Peter G. Peterson Foundation, will convene a research conference on May 20–21, 2027, in Washington, DC. Douglas Elmendorf (Harvard University) and James Poterba (MIT) will organize the conference. It will bring together researchers who are studying various aspects of long-term US fiscal policy, including the macroeconomic effects of government deficits, the impact of debt and deficits on financial markets, and the range of potential tax and spending reforms that could reduce structural deficits.

The organizers welcome research addressing, but not limited to, the following topics: 

  • The effect of government debt on short- and long-term interest rates, exchange rates, investment and consumption spending, and economic growth.
  • The measurement of the gap between interest rates and economic growth rates, the effect of risk on this gap, and the influence of this gap on debt sustainability.
  • The impact of the maturity structure of the Treasury’s debt issuance and of the Federal Reserve’s asset purchases on interest rates and deficits.
  • The connection between fiscal policy and inflation, including the potential impact of inflation on the debt-to-GDP ratio as well as the distributional consequences of higher inflation rates.
  • The composition of government spending, including the balance of spending on transfer payments and other services as well as disparities in spending on young, middle-aged, and older individuals.
  • The potential role of tax changes such as income tax reforms or the adoption of a consumption tax, in narrowing long-term deficits, including the effects of such changes on economic growth and the distribution of income.
  • Approaches for addressing uncertainty about future deficits, including ways for analysts to estimate and present uncertainty and for policymakers to respond to it.
  • The implications of addressing the rising debt later rather than sooner, including the distribution of the burden of policy changes and the possibility of a “fiscal crisis” in which interest rates on Treasury securities rise sharply.
  • The potential for efficiency improvements and anti-fraud initiatives to reduce government spending without substantial impact on the beneficiaries of spending programs.
  • The feedback between high and rising debt-to-GDP ratios and reform of tax and spending programs, and changes over time in this linkage.
  • The prospective impact of artificial intelligence (AI) on deficits, and possible changes in tax or spending policies considering the expanding use of AI.
  • The effect of fiscal institutions—including automatic stabilizers, balanced budget rules, and supermajority requirements for borrowing—on the trajectory of debt and deficits, including the experience of other nations and US states. 

The organizers welcome papers by scholars who are early in their careers and who are not NBER affiliates. In keeping with NBER guidelines, papers may not make policy recommendations.

To be considered for inclusion on the program, papers, or detailed project summaries with plans for completing papers by May 2027 must be uploaded by 11:59 pm ET on Monday, August 31, 2026, via the following link:

Submit Papers

Please do not submit papers that have already been accepted for publication and that will be published by May 2027. The organizers will notify authors whose papers are selected for the program by mid-September. Authors will participate in a virtual preconference in early November. The organizers plan to submit the papers from the conference, after editorial input, to the University of Chicago Press for potential publication in a proceedings volume. 

The NBER will cover travel costs to the conference of two authors per paper, subject to NBER travel reimbursement regulations, and additional authors are welcome to attend at their own expense. The authors of papers that are included on the program will receive a modest honorarium. Questions about the conference may be addressed to confer@nber.org