| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP16329
|
| DP16329 A Theory of Debt Accumulation and Deficit Cycles |
| Antonio Mele
|
| 发表日期 | 2021-07-05
|
| 出版年 | 2021
|
| 语种 | 英语
|
| 摘要 | This paper introduces a tractable model of sovereign debt where governments cannot default strategically, but face intertemporal tradeoffs between (i) preferring more primary deficits to less and (ii) avoiding costly defaults. Governments run deficits when debt and, then, the marginal costs of increasing debt are low. However, after an extended period of debt accumulation, default probabilities begin to rise quickly, and so do the marginal costs of running debt. Eventually, debt reaches a critical level relative to the size of the economy, a fiscal tipping point, after which debt accumulation stops, with governments cycling between deficits and surpluses, until perhaps a time of default. The main conclusions are that (i) fiscal tipping points typically occur when distance-to-default is between 10% and 20%; (ii) tipping points are pushed back in a stable macroeconomic environment, such that default premiums are higher in countries that implement austerity earlier and remain positive even when exogenous risk is very small (two "volatility paradoxes"); (iii) liquidity conditions and fiscal reforms may affect default probabilities in an ambiguous way; (iv) fiscal austerity may arrive too late: "debt intolerance" arises around the fiscal tipping point. |
| 主题 | Financial Economics
; International Macroeconomics and Finance
|
| 关键词 | Government debt
Default
Fiscal tipping points
Austerity
Deficit cycles
Volatility paradox
|
| URL | https://cepr.org/publications/dp16329
|
| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
|
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/545293
|
推荐引用方式
GB/T 7714 |
Antonio Mele. DP16329 A Theory of Debt Accumulation and Deficit Cycles. 2021.
|
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