全球智库信息集成服务系统(G2TT): DP14961 When is Sovereign Debt Odious? A Theory of Government Repression, Growth Traps, and Growth Boosts

G2TT

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.