The popular science project Econs presented a review of the new book «Fiscal Policy under Low Interest Rates» by Olivier Blanchard, one of the world's most cited economist. The work, which focuses on the intricacies of fiscal policy in modern conditions, was published in Russian by Gaidar Institute Press in 2025
The review pays particular attention to how Blanchard debunks the widespread myth about the unconditional harm of high public debt, proposing instead a more flexible and pragmatic approach to fiscal policy.
The authors of the review emphasize that, despite its focus on the period of low interest rates, the book offers valuable tools for analyzing the current situation of high interest rates. The key theme highlighted by the Econ experts is the interaction between fiscal and monetary policy and the conclusion that there is no universal “safe” level of debt. As Blanchard shows, economic stability is determined not so much by specific debt-to-GDP ratios as by the confidence provided by strong institutions and sound economic management.
The review also discusses in detail an important section of the book in which Blanchard analyzes the capabilities and limits of central banks. He explains that regulators can successfully counter speculative attacks on the sovereign debt market, but their ability to keep interest rates low is severely limited if investor doubts are caused by a deterioration in fundamental debt sustainability indicators.
The full text of the review and an excerpt from Olivier Blanchard's book Fiscal Policy under Low Interest Rate are available on the Econs website.