Australia's Fiscal Space: The Role of Public Investment

IF 1 4区经济学 Q3 ECONOMICS

Australian Economic Review Pub Date : 2022-07-22 DOI:10.1111/1467-8462.12481

Begoña Domínguez, John Quiggin

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Abstract

How large is Australia's fiscal space? Blanchard (2019) shows that as long as the real interest rate $R$ is below the real growth rate $G$ , a government can sustain a positive primary deficit with a constant (or even declining) ratio of public debt to GDP. In this article, we explain the neutral real interest rate and the reasons for its decline. Then, we discuss the results of a companion paper, Domínguez and Quiggin (2022), in which we quantify the fiscal space for Australia and find that a permanent increase in the primary deficit can be afforded up to reaching a debt to GDP ratio of 79 per cent. Furthermore, this so-called ‘free lunch’ in the fiscal space can be expanded if debt is used to finance public investment.

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澳大利亚的财政空间:公共投资的作用

澳大利亚的财政空间有多大?Blanchard(2019)表明，只要实际利率R$ R$低于实际增长率G$ G$，政府就可以在公共债务与GDP之比保持不变(甚至下降)的情况下维持正的初级赤字。在本文中，我们解释了中性实际利率及其下降的原因。然后，我们讨论了配套论文Domínguez和Quiggin(2022)的结果，其中我们量化了澳大利亚的财政空间，并发现基本赤字的永久增长可以达到债务与GDP之比的79%。此外，如果债务用于为公共投资融资，财政空间中的这种所谓的“免费午餐”可以扩大。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Australian Economic Review ECONOMICS-

CiteScore

1.90

自引率

10.00%

发文量

期刊介绍： An applied economics journal with a strong policy orientation, The Australian Economic Review publishes high-quality articles applying economic analysis to a wide range of macroeconomic and microeconomic topics relevant to both economic and social policy issues. Produced by the Melbourne Institute of Applied Economic and Social Research, it is the leading journal of its kind in Australia and the Asia-Pacific region. While it is of special interest to Australian academics, students, policy makers, and others interested in the Australian economy, the journal also considers matters of international interest.