The Deficit Gamble
The historical behavior of interest rates and growth rates in U.S. data suggests that the government can, with a high probability, run temporary budget deficits and then roll over the resulting government debt forever. The purpose of this paper is to document this finding and to examine its implications. Using a standard overlapping-generations model of capital accumulation, we show that whenever a perpetual rollover of debt succeeds, policy can make every generation better off. This conclusion does not imply that deficits are good policy, for an attempt to roll over debt forever might fail. But the adverse effects of deficits, rather than being inevitable, occur with only a small probability
Year of publication: |
[2021]
|
---|---|
Authors: | Ball, Laurence ; Elmendorf, Douglas W. ; Mankiw, N. Gregory |
Publisher: |
[S.l.] : SSRN |
Subject: | Öffentliche Schulden | Public debt | Glücksspiel | Gambling | Haushaltsdefizit | Budget deficit | Haushaltskonsolidierung | Fiscal consolidation |
Saved in:
freely available
Extent: | 1 Online-Ressource (49 p) |
---|---|
Series: | NBER Working Paper ; No. w5015 |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 1995 erstellt |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013239942