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Consequences of the Public Debt Crisis on Growth and Stability

Author

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  • Panagiotis Evangelopoulos

    (Department of Economics, University of Peloponnese, Greece)

Abstract

This research examines the public debt crisis that caused by the financial crisis in 2007-2008 after the immense involvement of the state as last resort. The purpose is to explain the consequences of the public debt crisis on growth and stability. This paper compares the macroeconomic policy of fiscal and monetary stability that characterizes modern Germany versus the expansive model that USA authorities exercise with fiscal stimulus and monetary quantitative easing. The author concludes that the restoration of the classical American constitutional tradition that restricts efficiently the expansive role of the state is the sufficient and the necessary condition, alongside a stable Germany, for divesting the disequilibria of the world economy. A balanced and symmetrical economic policy, based on the golden rule of stability, is the most effective way for the exodus of the world economic system from the global public debt crisis and for the global economic recovery.

Suggested Citation

  • Panagiotis Evangelopoulos, 2014. "Consequences of the Public Debt Crisis on Growth and Stability," Review of Economics & Finance, Better Advances Press, Canada, vol. 4, pages 47-56, August.
    • Handle: RePEc:bap:journl:140304
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Stability; Expansionism; Constitutional Tradition;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H19 - Public Economics - - Structure and Scope of Government - - - Other
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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