Public indebtedness, growth, currency and inflation: comment on “nice math”, by Gerson Lima - the reply

Abstract

This paper aims at replying critical commentaries made by LEITE, F. P., AGGIO, G. O. e ANGELI, E. (this Review, 2009) on two Author’s theses. The first one states that, if public deficit is to be financed, then either interest rate applied is negative or government invests as if it where a profit-making business enterprise. Otherwise, public debt will mathematically follow an explosive trend. The second one says that if there is no debt and public deficit is paid with money issuing, then the monetary stock will tend to an equilibrium level.

JEL Classification: E5; E6.