Everything would be fine if we knew which public spending has a significant positive effect on productivity gains

We will illustrate our analysis with the cases of the euro zone and France. Structural fiscal deficits will remain very high in 2022, although lower than in 2021. In addition, there appear to be huge additional public spending needs (innovation, industry, education, youth, energy transition, dependency, etc.). One could therefore imagine even larger structural fiscal deficits. Yet if the ECB reduces its government bond purchases and new fiscal rules are made, there would be reason to fear that structural fiscal deficits will instead have to be reduced. This problem would not exist if it was known precisely which public spending actually has a significant positive effect on productivity gains and therefore on long-term growth. This public spending could be safely financed by public debt, allowing structural fiscal deficits to remain high. But it is hard to know precisely which public spending increases productivity: generalities need to be replaced by a fine-grained analysis .