| HBS Case Collection
(Revised February 2013)
How Government Debt Accumulates
This note discusses the economics of government-debt accumulation. Fiscal deficits are only part of the picture; other factors include the level of debt as a percent of nominal GDP; the interest rate; the inflation rate; the growth rate; and changes in the exchange rate if some debt is owed in a foreign currency. The note discusses how these factors interact to affect government debt levels.
Keywords: Government and Politics;
Borrowing and Debt;