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来源类型 | Discussion paper |
规范类型 | 论文 |
来源ID | DP16687 |
DP16687 The Debt Capacity of a Government | |
Bernard Dumas; Chunyu Yang | |
发表日期 | 2021-11-02 |
出版年 | 2021 |
语种 | 英语 |
摘要 | In a deterministic overlapping-generations economy with production and physical capital, the price of debt can be positive without any budget surpluses being in the offing, because debt incorporates a rational bubble. Yet the dynamics of debt remain a function of the dynamics of the primary budget deficit. As a way to study their joint behavior, we endogenize a structural deficit in the form of an underfunded social-security scheme. We define debt capacity as the level of debt that can be just sustained without a change of policy all the way to an unstable steady state. When it starts below the capacity, the debt converges to a stable steady state, in which the bubble is sustained. Above capacity the bubble unravels and the deficit cannot be financed. In several realistic scenarios occurring in economies, we calculate the needed policy response, which is the true "fiscal cost" of exceeding debt capacity. |
主题 | Financial Economics |
关键词 | Debt capacity Fiscal policy Asset market bubbles Social security sustainability |
URL | https://cepr.org/publications/dp16687 |
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/545623 |
推荐引用方式 GB/T 7714 | Bernard Dumas,Chunyu Yang. DP16687 The Debt Capacity of a Government. 2021. |
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