Understanding public debt dynamics

Abstract

A brief account on the dynamics of public debt is given with the intent of explaining to high school students this crucial aspect in today's economic crisis. A simple model is proposed to argue that only for high enough values of an assumed constant rate ρ of increase of taxable resources there might exist a finite number of periods (years) for repaying an initial debt b0 contracted by a government with its reference national bank.

Keywords

• dívida pública
• modelo dinâmico
• econofísica