On the Determination of the Public Debt
AbstractA public debt theory is constructed in which the Ricardian invariance theorem is valid as a first-order proposition but where the dependence of excess burden on the timing of taxation implies an optimal time path of debt issue. A central proposition is that deficits are varied in order to maintain expect ed constancy in tax rates. This behavior implies a positive effect on debt issue of temporary increases in government spending (as in wartime) a countercyclical response of debt to temporary income movements, and a one-to-one effect of expected inflation on nominal debt growth. Debt issue would be invariant with the outstanding debt-income ratio and, except for a minor effect, with the level of government spending. Hypotheses are tested on U.S. data since World WXar1. Results are basically in accord Fith the theory. It also turns out that a small set of explanatory variables can account for the principal movements in interest-bearing federal debt since the 1920s.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3451400.
Date of creation: 1979
Date of revision:
Publication status: Published in Journal of Political Economy -Chicago-
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barro, Robert J. & Fischer, Stanley, 1976. "Recent developments in monetary theory," Journal of Monetary Economics, Elsevier, vol. 2(2), pages 133-167, April.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Should We Panic Over the Level of Federal Debt?
by ProGrowthLiberal in EconoSpeak on 2011-05-29 17:24:00
- A Few Critiques of Tim Taylors Historical Review of U.S. Government Deficits
by ProGrowthLiberal in EconoSpeak on 2012-12-06 17:08:00
- The long run government debt target
by Mainly Macro in Mainly Macro on 2013-01-11 18:11:00
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading lists or Wikipedia pages:
- Quantitative Macroeconomics and Real Business Cycles (QM&RBC)
- Top 1 items by number of citations
- Top 1 items by number of citations weighted by simple impact factors
- Top 1 items by number of citations weighted by recursive impact factors
- Top 1 items by number of citations discounted by age
- Top 1 items by number of citations weighted by simple impact factors and discounted by age
- Top 1 items by number of citations weighted by recursive impact factors and discounted by age
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Reinhard Engels).
If references are entirely missing, you can add them using this form.