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Using data on U.S. and Japanese government debt, we calibrate a version of Weil's (1989) model and study the international and intergenerational consequences of recent fiscal policy. Assuming debt/GDP ratios stabilize at current levels, the model implies: (1) the world real interest rate rises...
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We study the properties of an overlapping generations model with many-period-lived agents, neoclassical production and capital accumulation, labor-leisure decisions, population growth, and technological progress. We demonstrate that a plausibly calibrated version of this model has "monetary...
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This paper examines how the scale and composition of public debt can affect economies that implement a combination of …
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markets and endogenous government borrowing and show that governments choose higher levels of public debt when financial …
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Essay from the 2011 Annual Report.
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