This doctoral thesis treats three aspects of governement debt and deficits. First the sustainability question is investigated. The empirical results imply that the no-Ponzi-game condition cannot be rejected on Swedish quarterly data

Second the effects of internal and external government debt on private consumption is treated. This chapter points out capital controls as a new source of deviation from Ricardian equivalence. The empirical results, using Swedish quarterly data, strongly support that the private sector reacts differently on internal and external debt

The final chapter uses an endogenous growth OLG-model to study the growth effects of internal and external government borrowing. It is showed that internal debt has a bigger negative groth effect than external debt in a small economy with capital controls