Marijn Bolhuis on Fiscal R-star and its Implications for Macroeconomic Policy
Macro Musings with David Beckworth
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Understanding Fiscal R-star
This chapter explores the concept of fiscal R-star, the interest rate needed to stabilize a country's debt-to-GDP ratio while achieving targeted inflation. It contrasts fiscal R-star with the traditional monetary R-star, discussing their implications for fiscal and monetary policy tensions. Additionally, the chapter examines the growing fiscal monetary gap and its impact on economic stability, especially in light of changing growth dynamics influenced by factors like government debt and transformative technologies.
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