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来源类型 | Discussion paper |
规范类型 | 论文 |
来源ID | DP14961 |
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 |
URL | https://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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