J. Bradford DeLong and Lawrence Summers explained why an expansionary fiscal policy is effective in reducing a government's future debt burden, pointing out that the policy has a positive impact on its future productivity level. They pointed out that when an economy is depressed and its nominal interest rate is near zero, the real interest rate charged to firms formula_1 is linked to the output as formula_2. This means that the rate decreases as the real GDP increases, and the actual fiscal multiplier formula_3 is higher than that in normal times; a fiscal stimulus is more effective for the case where the interest rates are at the zero bound. As the economy is boosted by government spending, the increased output yields higher tax revenue, and so we have