Abstract

ZAVALETA GONZALEZ, Josué. Public debt accumulation and fiscal policy in Latin America. Inv. Econ [online]. 2020, vol.79, n.314, pp.3-27.  Epub Jan 29, 2021. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2020.314.76704.

Public debt accumulation is one of the problems to which governments pay more attention. In this regard, from an orthodox approach, fiscal austerity measures are the unique alternative to avoid and counteract a serious problem of public debt accumulation. However, it has recently been shown that the capacity of these policies to respond to this problem is limited and even could aggravate it. In this context, and as a response to the economic difficulties resulted from the global economic crisis imposed by the Covid-19, the aim of this paper is to show theoretically and empirically that an expansive fiscal policy, focused on increasing public investment, could reduce, or at least control, the public debt accumulation as a percentage of Gross Domestic Product (GDP).

Keywords : Public debt; public investment; fiscal policy; growth.