Debt paradox

The debt paradox refers to the theory of John Maynard Keynes , the situation in which the cost of an expansionary monetary policy will be offset by additional revenue and lower social injured (over). Private investments are rising so sharply, for example due to an economic stimulus program, that the costs of the program are offset by additional tax income.

Such a situation is difficult to observe empirically , however, as it is not possible to precisely filter out the increase in private investment triggered by an economic stimulus package from other influences such as monetary policy and global economic development. The interaction between fiscal and monetary policy is seen as crucial .

literature

• Jürgen Kromphardt: Fundamentals of Macroeconomics . Verlag Vahlen, Munich 2006, ISBN 3-8006-3309-4 .