The Monetary-Fiscal Mix: Long-Run Implications
AbstractThe long-run dynamics of public deficits and debt are modeled, assuming that public debt competes with capital for limited private savings. The interest costs of the debt are endogenously determined in this market, and the deficit in other budget transactions is a constant fraction of Gross National Product. Simulations with parameter values suggested by recent United States experience show the likelihood of unstable paths, along which debt grows faster than GNP indefinitely.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 780.
Length: 15 pages
Date of creation: Jan 1986
Date of revision:
Publication status: Published in AEA Papers and Proceedings (May 1986), 76(2): 213-218
Note: CFP 645.
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Postal: Yale University, Box 208281, New Haven, CT 06520-8281 USA
Phone: (203) 432-3702
Fax: (203) 432-6167
Web page: http://cowles.econ.yale.edu/
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
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- Bianconi, Marcelo, 2000.
"The effects of alternative fiscal policies on the intertemporal government budget constraint,"
International Review of Economics & Finance,
Elsevier, vol. 9(1), pages 31-52, February.
- Marcelo Bianconi, 1999. "The Effects of Alternative Fiscal Policies on the Intertemporal Government Budget Constraint," Discussion Papers Series, Department of Economics, Tufts University 9906, Department of Economics, Tufts University.
- Alberto Bagnai, 2004.
"Keynesian And Neoclassical Fiscal Sustainability Indicators, With Applications To Emu Member Countries,"
- Alberto Bagnai, 2004. "Keynesian and neoclassical fiscal susteinability indicators, with applications to EMU member countries," Working Papers 75, University of Rome La Sapienza, Department of Public Economics.
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