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Degrowth and sustainable public finance

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  • Pasche, Markus

Abstract

Using well-known results from public debt dynamics, it is shown that in case of degrowth a sustainable public debt is very unlikely to achieve. Degrowth requires that negative real interest rates have to be maintained which might imply accelerated inflation, or other severe goal conflicts of public finance will result.

Suggested Citation

  • Pasche, Markus, 2018. "Degrowth and sustainable public finance," MPRA Paper 87109, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:87109
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    References listed on IDEAS

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    1. Rana Sajedi & Gregory Thwaites, 2016. "Why Are Real Interest Rates So Low? The Role of the Relative Price of Investment Goods," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(4), pages 635-659, November.
    2. Ayres, Robert U., 1996. "Limits to the growth paradigm," Ecological Economics, Elsevier, vol. 19(2), pages 117-134, November.
    3. Mr. Julio Escolano, 2010. "A Practical Guide to Public Debt Dynamics, Fiscal Sustainability, and Cyclical Adjustment of Budgetary Aggregates," IMF Technical Notes and Manuals 2010/002, International Monetary Fund.
    4. Malmaeus, J. Mikael & Alfredsson, Eva C., 2017. "Potential Consequences on the Economy of Low or No Growth - Short and Long Term Perspectives," Ecological Economics, Elsevier, vol. 134(C), pages 57-64.
    5. Julio Escolano, 2010. "A Practical Guide to Public Debt Dynamics, Fiscal Sustainability, and Cyclical Adjustment of Budgetary Aggregates," IMF Technical Notes and Manuals 10/02, International Monetary Fund.
    6. van den Bergh, Jeroen C.J.M., 2011. "Environment versus growth -- A criticism of "degrowth" and a plea for "a-growth"," Ecological Economics, Elsevier, vol. 70(5), pages 881-890, March.
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    Cited by:

    1. Pasche, Markus, 2018. "Is there green growth in OECD countries?," MPRA Paper 87726, University Library of Munich, Germany.
    2. Olk, Christopher & Schneider, Colleen & Hickel, Jason, 2023. "How to pay for saving the world: Modern Monetary Theory for a degrowth transition," LSE Research Online Documents on Economics 120343, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    degrowth; sustainability; public debt; goal conflict;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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