We find that the welfare gains to being at the optimum quantity of debt rather than the current U.S. level are small …, and, therefore, concerns regarding the high level of debt in the U.S. economy may be misplaced. This finding is based on a … and borrowing constraints. This model incorporates a different role for government debt than is found in standard models …

We characterize the values of government debt and the debt's maturity structure under which financial crises brought on …'s fundamentals place it inside the crisis zone, the government is motivated to reduce its debt and exit the crisis zone because this … leads to an economic boom and a reduction in the interest rate on the government's debt. We show that this reduction may be …

debt relationship, and (ii) regardless of their past actions, governments can earn the (possibly state-contingent) market … models with multiple relationships and spillover across them, reputation may support debt. This paper shows what is needed …

), except that we let the government default on its debt. As a benchmark, we consider Ramsey equilibria in which the government … with positive debt can be supported by such trigger mechanisms. …

This paper presents a government debt game with the property that if the timing of debt auctions within a period is … debt structure is identical to the set of equilibrium outcome paths given the government can issue only one-period debt. …

This paper studies the maturity composition and the term structure of interest rate spreads of government debt in … emerging markets. In the data, when interest rate spreads rise, debt maturity shortens and the spread on short-term bonds is … endogenous default and multiple maturities of debt. Short-term debt can deliver higher immediate consumption than long-term debt …

reputation models cannot support debt. We argue that these standard reputation models are partial in the sense that actions of …. We show that our general model of reputation can support large amounts of debt. …

way to debt finance and later to the emergence of equity as an additional instrument for raising funds externally. As the … economy develops further, the aggregate ratio of debt to equity will generally fall. We analyze that portion of their account … concerning the evolution of equity markets. We show that in an important sense, debt and equity are complementary sources for the …