Debt Sustainability: The Harmonization of the Account Principles

The “Goal” of my research is to analyze the effects of public debt and to work out the mechanisms that make public effect the real side of an economy, using modern models of endogenous economic growth theory. My analysis starts with the intertemporal budget constraint of the government to which the government must operates on. The condition when the public debt is sustainable is defined by “public spending” and “public revenues” ignoring the central bank of an economy in the majority of cases. Governments should not rely on central banks to reduce public debt through money creation since central banks are independent and there is no obligation for them to assist government in pursuing sustainable debt policies.