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When is Sovereign Debt Odious? A Theory of Government Repression, Growth Traps, and Growth Boosts

Acharya, Viral V.; Rajan, Raghuram Govind; Shim, Jack - National Bureau of Economic Research - 2022

We examine the dynamics of a country's growth, consumption, and sovereign debt, assuming that the government is myopic … in a "growth boost", with higher steady-state household consumption than if it could not borrow. However, in a country … "growth trap" where household steady-state consumption is lower than if the government had no access to debt. We discuss the …

Persistent link: https://www.econbiz.de/10013334513

Liquidity Dependence and the Waxing and Waning of Central Bank Balance Sheets

Acharya, Viral V.; Chauhan, Rahul S.; Rajan, Raghuram Govind - National Bureau of Economic Research - 2023

When the Federal Reserve (Fed) expanded its balance sheet via quantitative easing (QE), commercial banks financed reserve holdings with deposits and reduced their average maturity. They also issued lines of credit to corporations. However, when the Fed halted its balance-sheet expansion in 2014...

Persistent link: https://www.econbiz.de/10014247971

Contingent Credit Under Stress

Acharya, Viral V.; Jager, Maximilian; Steffen, Sascha - National Bureau of Economic Research - 2023

Over the past two decades, banks have increasingly focused on offering contingent credit in the form of credit lines as a primary means of corporate borrowing. We review the existing body of research regarding the rationales for banks' provision of liquidity insurance in the form of credit...

Persistent link: https://www.econbiz.de/10014437040