Saving, Investment, the Fiscal Deficit, and the Management of Public Debt

This chapter is about saving investment, the fiscal deficit, and management of the public debt. It begins with a focus on the saving investment and current account. In open economies, borrowing and lending happens across countries, and the difference between saving and investment in an open economy is the current account balance. It talks about the crowding out effect and its impact on the economy. Professor Larraín uses mathematical formulas to explain public debt, and concludes by commenting on growth rate.

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