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<p>The political debate regarding the consequences of the German “debt brake” continues. The arguments against its current design are similar to the arguments brought forward in 2009, when the rule was first introduced. One hot-button issue has always been whether the German debt brake constrains public investment. A recent study by Feld et al. (2024) applies the synthetic control method to address this question. Mühlenweg et al. (2024) criticise their approach, building on well-known arguments against the German debt brake. This article counters their arguments.</p>
</abstract>

The political debate regarding the consequences of the German “debt brake” continues. The arguments against its current design are similar to the arguments brought forward in 2009, when the rule was first introduced. One hot-button issue has always been whether the German debt brake constrains public investment. A recent study by Feld et al. (2024) applies the synthetic control method to address this question. Mühlenweg et al. (2024) criticise their approach, building on well-known arguments against the German debt brake. This article counters their arguments.

Debt Brake and Public Investment: Reply to Mühlenweg et al. (2024)

Wirtschaftsdienst

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Schuldenbremse und öffentliche Investitionen: Erwiderung auf Mühlenweg et al. (2024)

The political debate regarding the consequences of the German “debt brake” continues. The arguments against its current design are similar to the arguments...

Debt Brake and Public Investment: Reply to Mühlenweg et al. (2024)

Published Online: Jul 18, 2024

Page range: 476 - 481

DOI: https://doi.org/10.2478/wd-2024-0123

© 2024 Lars P. Feld et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.