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Samstag, 4. Januar 2014

correction of formula on public debt & deficit in Boskin paper and Schemmann book

Hi folks,

as I read Michael Schemmann's 2010 book about "European Monetary Reform", I stumbled onto a couple of formulas for the mathematically intended, they are relating public debt, growth, public deficit and interest rate. These are interesting subjects that I touched a couple of months ago in my treatise on perpetual public deficits and debt

A quick plausibility check showed that at least one of the formulas was wrong. The formulas were referenced to a paper by M.J.Boskin, so I looked them up there, and there the wrong one was wrong as well.
So I set out to determine the correct one, to identify the (typing) mistakes, and to look at how useful the formulas are when evaluating the sustainability of public deficits.
You find this information here, under the title:
"Correction of the formula on public debt as published by Mr Michael J. Boskin in 1988, and referenced to by Mr Michael Schemmann in 2010"                            by Jean-Claude Schmitz.

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