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Interest Rate Risk and Other Determinants of Post-WWII U.S. Government Debt/GDP Dynamics

Hall, George J. - 2010

This paper uses the sequence of government budget constraints to motivate estimates of interest payments on the U.S. Federal government debt. We explain why our estimates differ conceptually and quantitatively from those reported by the U.S. government. We use our estimates to account for...

Persistent link: https://www.econbiz.de/10012462950

Credit Crises, Precautionary Savings, and the Liquidity Trap

Guerrieri, Veronica - 2011

their precautionary savings. This depresses interest rates, especially in the short run, and generates an output drop, even …

Persistent link: https://www.econbiz.de/10012461074

Liquidity Constraints and Precautionary Saving

Carroll, Christopher D. - 2001

Economists working with numerical solutions to the optimal consumption/saving problem under uncertainty have long known that there are quantitatively important interactions between liquidity constraints and precautionary saving behavior. This paper provides the analytical basis for those...

Persistent link: https://www.econbiz.de/10012470222

A Theory of the Consumption Function, With and Without Liquidity Constraints (Expanded Version)

Carroll, Christopher D. - 2001

This paper argues that the modern stochastic consumption model, in which impatient consumers face uninsurable labor income risk, matches Milton Friedman's (1957) original description of the Permanent Income Hypothesis much better than the perfect foresight or certainty equivalent models did. The...

Persistent link: https://www.econbiz.de/10012470333

Savings and the Terms of Trade Under Borrowing Constraints

Agenor, Pierre-Richard - 2000

This paper examines the extent to which permanent terms-of-trade shocks have an asymmetric effect on private savings … in bad states of nature, savings rates will respond asymmetrically to favorable movements in the permanent component of … standard determinants of private savings. The results, based on panel data for non-oil commodity exporters of sub …

Persistent link: https://www.econbiz.de/10012471007

Dissaving by the Elderly, Transfer Motives and Liquidity Constraints

Ando, Albert - 1993

Two explanations have been proposed for the observed slowness of wealth decumulation by the elderly in the literature: the precautionary saving induced by (uninsurable) uncertainty about the time of death or by the possibility of major catastrophes in old age that require large outlays; the...

Persistent link: https://www.econbiz.de/10012474371

Saving and Liquidity Constraints

Deaton, Angus - 1989

This paper is concerned with the theory of saving when consumers are not permitted to borrow, and with the ability of … such a theory to account for some of the stylized facts of saving behavior. When consumers are relatively impatient, and …

Persistent link: https://www.econbiz.de/10012475841

Fiscal Policy in Debt Constrained Economies

Aguiar, Mark A. - 2011

We study optimal fiscal policy in a small open economy (SOE) with sovereign and private default risk. The SOE's government uses linear taxation to fund exogenous expenditures and uses public debt to inter-temporally allocate tax distortions. We characterize a class of environments in which the...

Persistent link: https://www.econbiz.de/10012461202

Doubling Down on Debt : Limited Liability as a Financial Friction

Perla, Jesse - 2020

We investigate how a combination of limited liability and preexisting debt distort firms' investment and equity payout decisions. We show that equity holders have incentives to "double-sell" cash flows in default, leading to overinvestment, provided that the firm has preexisting debt and the...

Persistent link: https://www.econbiz.de/10012481295

Pubic Debt and U.S. Saving : A New Test of the Neutrality Hypothesis

Boskin, Michael J. - 1985

savings has primarily focused on the impact of particular policy variables on savings. In this paper we examine Barro …

Persistent link: https://www.econbiz.de/10012477434