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Policy Matters

May 6, 2020

Over the past decade, U.S. federal debt as a share of the economy has grown to levels not reached since the aftermath of World War II. Recent tax cuts and ongoing fiscal stimulus related to the Covid-19 pandemic have placed U.S. debt on an unstable and unprecedented path moving forward. Gauging the long-term sustainability of federal debt hinges on projections of one key underlying variable: the interest rate.  How are debt projections and the interest rate tied to broad demographic transformations underway in the U.S. and across the world today? And how worried should we be by rising federal debt?  

This special podcast is drawn from a webinar hosted by the Baker Institute Roundtable on April 28. It features Dr. Jorge Barro, a fellow in public finance at the Baker Institute. His area of research involves the development of dynamic macroeconomic models for fiscal policy evaluation. Barro is joined by Ms. Morgan Garvey, stewardship officer at the institute.