Debt Sustainability:A International Macroeconomic Analysis

I start this work with a important introduction of what is the “The Keynesian Approach” and how it has dominated the politico-economic principles after Word War II in particular during the 1970s where governments must play an active role in stabilizing market economies. The second important aspect that I analize in my book is the public expenditures and how it can raise the aggregate demand with the spending being financed by public deficits. With low aggregate demand and high unemployment the government in the Keynesian approach must become active in order to achieve the full employment equilibrium which then allows to reduce the public debt. The public debt does not pose a problem if the government runs into debt in the home country because no resources are lost and public deficits just imply a reillocation of resources from tax players to bondholders.