This paper provides general equilibrium estimates of the steady-state welfare gains of lowering inflation from a low level to close to price stability, using an overlapping-generations growth model. Money demand is modeled on the basis that real money balances are a factor of production....

At moderate levels, debt improves welfare and enhances growth. But high levels can be damaging. When does debt go from good to bad? We address this question using a new dataset that includes the level of government, non-financial corporate and household debt in 18 OECD countries from 1980 to...

This paper sheds new light on the growth implications of public debt introducing a dynamic panel threshold model by accounting for regime dependent intercepts and focusing on 12 Euro zone economies over the 1980-2012 period. The threshold estimates for debt are estimated by using multiple...

The significant difference in saving rates between the United States (near-zero) and the developing nations (exceeding 30%) is a contributing explanation for the record U.S. current-account deficit, now almost 700 billion USD per year. Analytic support for this conclusion is provided herein by...

This article reconsiders the relationship between government debt and welfare in a two-country overlapping-generations model with lifetime uncertainty and international product differentiation. It has recently been proposed that a higher steady-state debt level may be welfare-enhancing in this...

The fiscal deficit is "ill defined"; it is "without theoretical background"; it is "a number in search of a concept". Such judgements are characteristic of a prominent part of the literature on the new measurement concept of generational accounting. This paper argues that such criticism is...

After running several years for growth, few economists are arguing De-growth is better for the world. They argue that natural resources are exhausting as they are consumed at higher rate than they are generated. We argue that growth is sine qua non to maintain reasonable living standard for the...

Households’ and firms’ subjective inflation expectations play a central role in macroeconomic and intertemporal microeconomic models. We discuss how subjective inflation expectations are measured, the patterns they display, their determinants, and how they shape households’ and firms’...

Hedge fund managers are subject to several non-linear incentives: (a) performance fee options (call); (b) equity investor's redemption options (put); (c) prime broker contracts allowing for forced deleverage (put). The interaction of these option-like incentives affects optimal leverage ex-ante,...

In this paper we study empirically the implications of macroeconomic disagreement for the time variation in bond market risk premia. If there is a source of heterogeneity in the belief structure of the economy then differences in beliefs can affect equilibrium asset prices, and the dynamics of...