Public debt: a simple model

Abstract

A simple model is developed to deal with the financial dimension of the public
and its relation to external adjustment. The effects of an exchange devaluation, of an easing
of the external restriction, and the role of fiscal policy under a wealth-effect intense enough
are discussed. Finally, a comment on the determinants of the rate of interest and its intertemporal
aspects.

JEL Classification: H62; H63.