G2TT
来源类型Discussion paper
规范类型论文
来源IDDP14961
DP14961 When is Sovereign Debt Odious? A Theory of Government Repression, Growth Traps, and Growth Boosts
Viral Acharya; Raghuram Rajan; Jack B. Shim
发表日期2022-06-28
出版年2022
语种英语
摘要We examine the dynamics of a country's growth, consumption, and sovereign debt, assuming that the government is myopic and wants to maximize short-term, self-interested spending. Surprisingly, government myopia can increase a country's access to external borrowing. In turn, access to borrowing can extend the government's effective horizon; the government's ability to borrow hinges on it convincing creditors they will be repaid, which gives it a stake in generating future revenues. In a high-saving country, the lengthening of the government's effective horizon can incentivize it to tax less, resulting in a ``growth boost", with higher steady-state household consumption than if it could not borrow. However, in a country that saves little, the government may engage in more repressive policies to enhance its debt capacity. This could lead to a ``growth trap'' where household steady-state consumption is lower than if the government had no access to debt. We discuss the effectiveness of alternative debt policies, including declaring debt odious, debt forgiveness, and debt ceilings. We also analyse the impact of unanticipated shocks on the country's welfare.
主题Financial Economics
关键词Sovereign debt Government myopia Financial repression Allocation puzzle Debt ceiling
URLhttps://cepr.org/publications/dp14961-0
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/546485
推荐引用方式
GB/T 7714
Viral Acharya,Raghuram Rajan,Jack B. Shim. DP14961 When is Sovereign Debt Odious? A Theory of Government Repression, Growth Traps, and Growth Boosts. 2022.
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