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We examine a large set of economic, sociopolitical, and institutional variables in a panel of 57 developed and developing countries over the period of 1970-90 to derive robust conclusions about which variables are important in explaining cross-country differences in public sector deficits....
Persistent link: https://www.econbiz.de/10014109806
We examine a large set of economic, sociopolitical, and institutional variables in a panel of 57 developed and developing countries over the period of 1970-90 to derive robust conclusions about which variables are important in explaining cross-country differences in public sector deficits....
Persistent link: https://www.econbiz.de/10014110755
We calibrate an incomplete markets large scale OLG model to the US income and wealth distribution and examine the effects of alternative government debt levels and adjustment policies on macroeconomic aggregates and welfare. We find that the government should hold negative debt. Due to the high...
Persistent link: https://www.econbiz.de/10013047686
We study the impact of a government spending shock on the distribution of income and wealth between cohorts in a dynamic stochastic Overlapping Generations model with two types of households, Ricardian households and rule-of-thumb consumers. We demonstrate that an unexpected increase in...
Persistent link: https://www.econbiz.de/10011458011
This paper studies the impact of income inequality on sovereign spreads under elastic labor and endogenous taxation. We first document that high pre-tax income inequality is associated with high spreads both across countries and across U.S. states. We then develop a sovereign default model with...
Persistent link: https://www.econbiz.de/10012840571
Fiscal interventions in the form of higher public debt depend on whether an economy is dynamically efficient or not, and thus on the tax burden of public debt. The consequence of such policy to wealth inequality is, however, largely unknown. This paper assesses the implications of public debt...
Persistent link: https://www.econbiz.de/10012842416
We propose a theory of indebted demand, capturing the idea that large debt burdens by households and governments lower … aggregate demand, and thus natural interest rates. At the core of the theory is the simple yet under-appreciated observation …
Persistent link: https://www.econbiz.de/10012199991
We build a dynamic general equilibrium model with heterogeneous households, namely Rich and Poor, and capital skill complementarity structure in the production function, to study aggregate and distributional implications of fiscal consolidation policies when the government uses a rich set of...
Persistent link: https://www.econbiz.de/10012029011
This paper studies how distributional and electoral concerns shape sovereign default incentives within a quantitative model of sovereign debt with heterogeneous agents and non-linear income taxation. The small open economy is characterized by a two-party system in which the left-wing party has a...
Persistent link: https://www.econbiz.de/10014248102
Using panel data of 17 OECD countries for 1980-2011, we find that the distributional consequences of fiscal consolidations depend significantly on the level of private indebtedness. Austerity leads to a strong and persistent increase in income inequality during periods of private debt overhang....
Persistent link: https://www.econbiz.de/10012964621