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Dynamic Efficiency, the Riskless Rate, and Debt Ponzi Games under Uncertainty Author info | Abstract | Publisher info | Download info | Related research | Statistics Olivier Blanchard (MIT and NBER)
Philippe Weil (Université Libre de Bruxelles (ECARES), CEPR and NBER)
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registered author(s):
In a dynamically efficient economy, can a government roll its debt forever and avoid the need to raise taxes? In a series of examples of economies with zero growth, this paper shows that such Ponzi games may be infeasible even when the average rate of return on bonds is negative, and may be feasible even when the average rate of return on bonds is positive. The paper then reveals the structure which underlies these examples.
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Article provided by Berkeley Electronic Press in its journal Advances in Macroeconomics .
Volume (Year): 1 (2001)
Issue (Month): advances/1/2 ()
Pages: 1031-1031
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Handle: RePEc:bep:macadv:v:1:y:2001:i:advances/1/2:p:1031-1031Note: oai:bepress:bejm-1031Contact details of provider: Web page: http://www.bepress.com/bejm/advances/
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Keywords: dynamic efficiency riskless rate ponzi games Other versions of this item:
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