Keyword: «debt financing»

The author analyzes the relationship between price dynamics and real GDP dynamics. In the short-term periods of economic development, such a relationship is not obvious. That is why the author considers a very long historical period (200 years, broken down into four 50-year periods). In American economic history, these periods differ substantially. During this time, the US economy has evolved from self-regulating on the basis of market interdependencies to externally regulated with the help of tools of conscious influence on the main macroeconomic proportions. 50-year periods differ both in the dynamics of prices and in the dynamics of real GDP. In general, in the 19th century, the American economy developed more dynamically. In the 20th century, starting in the 1950s, the growth rate of real GDP began to increase as a result of inflationary “warming up”. However, they have not reached the indicators of the previous century. In addition, the conscious use of inflation to accelerate economic growth is possible only through the active use of debt financing. The article shows that this logic of economic development leads to deflation, accompanied by a sharp decrease in real GDP growth. The Japanese economy is used as an example.

All functional economic actors, producers and consumers attract other people's funds to improve their own efficiency. The state, like functional entities, strives to improve the efficiency of its activities. For this, borrowed funds are used. This increases the ability of the state to produce public goods and services. At the same time, the equilibrium and actual GDP of the country is growing. Empirical data for the USA, China, Japan and Russia for 2011–2020. make it possible to test the hypothesis that debt financing of the state, enterprises and households contributes to an increase in macroeconomic efficiency. To solve the stated problem, the article uses indicators of the amount of debt (the share of the debt of the respective entities in GDP), the price of attracting other people's funds (the real interest rate for producers and consumers and the real yield on 10-year government bonds). Debt multiples are calculated. Based on the data obtained, conclusions are drawn about the efficiency / inefficiency of debt financing of economic entities in the USA, China, Japan, Russia for 2011–2020.