著者

RAYMOND G. BATINA TOSHIHIRO IHORI

出版者

JAPANESE ECONOMIC ASSOCIATION

雑誌

The Economic Studies Quarterly (ISSN:0557109X)

巻号頁・発行日

vol.44, no.2, pp.117-130, 1993-06-18 (Released:2007-10-19)

参考文献数

16

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An increase in the foreign country's stock of debt will raise the world interest rate and may cause the world economy to begin following a divergent path which eventually leads to bankruptcy. A number of austerity measures are discussed, e.g., tax increases, public spending decreases, and institutional reforms. Each will have a different effect on the steady state equilibrium and the dynamic adjustment path of the economy and paradoxical results may occur depending on the response of capital accumulation.