IDEAS home Printed from https://ideas.repec.org/a/agr/journl/vxxxiiy2025i2(643)p121-128.html
   My bibliography  Save this article

Government debt service, interest rates, and macroeconomic stability: a conceptual approach

Author

Listed:
  • Richard J. CEBULA

    (University of Tennessee, United States of America)

  • G. Jason JOLLEY

    (Ohio University, United States of America)

  • Kamal P. UPADHYAYA

    (University of New Haven, United States of America)

  • Franklin G. MIXON Jr.

    (Columbus State University, United States of America)

Abstract

The U.S. national debt exceeded $1 trillion, driven by COVID-19 spending and military conflicts. Debt service payments rose 80.4% in four years, from $521 billion to $940 billion. This paper presents a macroeconomic model analyzing the monetary policy’s impact on debt service and national debt growth. Federal spending is divided into real expenditures on goods/services and interest-sensitive debt payments. The model suggests that if the interest sensitivity of debt payments surpasses that of household/business spending, expansionary monetary policy results in a negative macroeconomic multiplier, posing significant challenges for policymakers amidst growing debt service obligations.

Suggested Citation

  • Richard J. CEBULA & G. Jason JOLLEY & Kamal P. UPADHYAYA & Franklin G. MIXON Jr., 2025. "Government debt service, interest rates, and macroeconomic stability: a conceptual approach," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(643), S), pages 121-128, Summer.
  • Handle: RePEc:agr:journl:v:xxxii:y:2025:i:2(643):p:121-128
    as

    Download full text from publisher

    File URL: http://store.ectap.ro/articole/1835.pdf
    Download Restriction: no

    File URL: http://www.ectap.ro/articol.php?id=1835&rid=159
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:agr:journl:v:xxxii:y:2025:i:2(643):p:121-128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mircea Dinu (email available below). General contact details of provider: https://edirc.repec.org/data/agerrea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.