Learning to Live with Debt

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Publication Date May 2021
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Europe needs a new consensus that recognises the benefits of higher public debt, such as increased public investment and more safe assets to invest in, and is less obsessive about the potential costs of debt. Low interest rates are most probably here to stay; and faster growth, not austerity is the best way to stabilise public debt.  Nor should that new consensus shy away from debt monetisation as a potential safety valve. Central banks are public institutions, and can be enlisted to help states fund themselves in times of rising interest rates. The risk of temporarily higher inflation should be seen as part of a cost-benefit analysis, and not something to avoid at all costs.

Source Link https://www.cer.eu/publications/archive/policy-brief/2021/learning-live-debt
Alternative sources
  • https://www.cer.eu/sites/default/files/pbrief_debt_17.5.21.pdf
Related Links
ESO Records
LUISS Policy Briefs: 7/2021: Common debt https://www.europeansources.info/record/common-debt-nextgeneration-is-not-the-first-case/
Journal of Common Market Studies: Volume 58, Number 3, Pages 672-687: High Public Debt in the Euro Area: A Tale of Belgium and Italy https://www.europeansources.info/record/high-public-debt-in-the-euro-area-a-tale-of-belgium-and-italy/

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