Kocherlakota, Narayana Rao - National Bureau of Economic Research - 2021
admit a bubble in public debt. In this context, I show that it is possible to stabilize either inflation or output in … policy). The theoretical analysis implies that, in the presence of a large public debt bubble, fiscal policy is a more … response to aggregate shocks by varying only fiscal policy (that is, lump-sum uniform transfers). In contrast, when the public …