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We ask how fiscal deficits are financed in environments with two key features: (i) nominal rigidity, and (ii) a violation of Ricardian equivalence due to finite lives or liquidity constraints. In such environments, deficits can contribute to their own financing through two channels: a boom in real economic activity, which expands the tax base; and a surge in inflation, which erodes the real value of nominal government debt. Our main theoretical result establishes that this mechanism becomes more potent as fiscal adjustment is delayed, leading to full self‐financing in the limit: if the monetary authority does not lean too heavily against the fiscal stimulus, then the government can run a deficit today, refrain from tax hikes or spending cuts in the future, and still see its debt converge back to its initial level. We further demonstrate that a significant degree of self‐financing is achievable when the theory is disciplined by empirical evidence on marginal propensities to consume, nominal rigidities, the monetary policy reaction, and the speed of fiscal adjustment. 

Abstract Ferroptosis has been shown to play a crucial role in preventing cancer development, but the underlying mechanisms of dysregulated genes and genetic alternations driving cancer development by regulating ferroptosis remain unclear. Here, we showed that the synergistic role of ELF3 overexpression and PTEN deficiency in driving lung cancer development was highly dependent on the regulation of ferroptosis. HumanELF3(hELF3) overexpression in murine lung epithelial cells only caused hyperplasia with increased proliferation and ferroptosis. hELF3overexpression andPtengenetic disruption significantly induced lung tumor development with increased proliferation and inhibited ferroptosis. Mechanistically, we found it was due to the induction of SCL7A11, a typical ferroptosis inhibitor, and ELF3 directly and positively regulated SCL7A11 in the PTEN-deficient background. Erastin-mediated inhibition of SCL7A11 induced ferroptosis in cells with ELF3 overexpression and PTEN deficiency and thus inhibited cell colony formation and tumor development. Clinically, human lung tumors showed a negative correlation betweenELF3andPTENexpression and a positive correlation betweenELF3andSCL7A11in a subset of human lung tumors withPTEN-low expression.ELF3andSCL7A11expression levels were negatively associated with lung cancer patients’ survival rates. In summary, ferroptosis induction can effectively attenuate lung tumor development induced byELF3overexpression andPTENdownregulation or loss-of-function mutations.