Long-Term Fiscal Policy: The Economics of Debt and Deficits

February 26–27, 2026 — Cambridge, MA

The US fiscal condition has deteriorated over the last two decades, prompting recent calls from the International Monetary Fund and the Organisation for Economic Co-operation and Development (OECD) for increased attention to long-term fiscal balance. Record peace-time primary deficits during the global financial crisis and the COVID-19 pandemic have resulted in near-record levels of the debt-to-GDP ratio. Rising debt levels as well as rising real interest rates in recent years have boosted federal interest payments as a share of GDP. Projections by the Congressional Budget Office (CBO) suggest rising debt levels for the next three decades. 

In light of the prospective path of debt and deficits in the US as well as many other OECD countries, the consequences of budget deficits and government borrowing, and the definition and assessment of fiscal sustainability, are drawing new attention. The crowding out effects of debt, and the economics of debt management, are being studied in new ways. To promote research on the economics of government borrowing, the macroeconomic effects of government deficits, and the way fiscal policy adjusts to unsustainable situations, the National Bureau of Economic Research (NBER) will convene a research conference on February 26–27, 2026 in Cambridge, MA. This conference will showcase new research findings and contribute to the formulation of a research agenda on debt and deficits. 

The conference will be organized by Markus Brunnermeier (Princeton University) and Ricardo Reis (London School of Economics). It will bring together researchers who are studying the economic effects of government debt from the perspectives of macroeconomics, public finance, monetary economics, international finance, and asset pricing. The organizers welcome both conceptual and empirical work on the following topics, and other related ones:

  • The effect of higher levels of debt to GDP on short- and long-term interest rates, exchange rates, investment and consumption spending
  • The gap between risk-adjusted interest rates and economic growth rates, and its role in the sustainability of the debt
  • The effect of geopolitical tensions in the evolving global economic landscape, including the tension between the US and China, on the demand for US Treasury debt
  • The specialness of US government debt in connection to the provision of safe assets and the role of the USD as a global reserve currency
  • The “flight-to-safety” phenomenon traditionally associated with US government debt and resilience after possible loss of “safe asset status”
  • The role of debt maturity decisions by the US Treasury and finance ministries elsewhere, and the interplay between them and monetary policy choices, such as central bank asset purchases, in affecting interest rates and deficit trajectories
  • The effect of financial market frictions and regulatory constraints in potentially destabilizing the markets for US Treasury debt
  • The connection between fiscal policy and inflation and its potential relevance for the current US economy
  • The feedback loops between the debt-to-GDP ratio, interest payments as a share of GDP, and the growth of spending, distinguishing between entitlement programs and other programs
  • The timing and magnitude of tax policy responses to government deficits 
  • The impact of tax policy on economic growth, with particular emphasis on the way different tax instruments impact GDP growth over the long term
  • The role of countercyclical fiscal policy and the ability to pursue it when public debt is high

 

The organizers welcome papers by scholars who are early in their careers and who are not NBER affiliates. Submissions must include brief disclosures summarizing any financial or other potential conflicts of interests of the authors. In keeping with NBER guidelines, papers may not make policy recommendations.

To be considered for inclusion on the program, upload papers by 11:59pm ET on Thursday, October 16, 2025.  

Please do not submit papers that have been accepted for publication and that will be published by February 2026. Authors chosen to present papers will be notified in early November.

The NBER will cover the travel costs of two authors per paper, subject to NBER travel reimbursement regulations. All additional authors are welcome to attend the conference at their own expense. Questions about this conference may be addressed to confer@nber.org.