A positive theory of government debt

A government that cannot commit to future policy choices faces a trade-off that explains the level of debt. On the one hand, there is an incentive to increase debt and delay taxation, so as to reduce current distortions. On the other hand, inflating current prices lowers the real value of nominal debt and so there is a motive to reduce it now. The size of long-run debt will depend on the interaction of these two opposing incentives. The critical determinant is the willingness of households to substitute away from goods being taxed by inflation. Numerical simulations show that the model matches some qualitative and quantitative properties of U.S. policy variables, including the fact that wars are frequently financed with a mix of instruments. The theory interprets the unusual post-World War II inflation and fast liquidation of accumulated debt as being due to higher long-run debt and expenditure in the period leading up to the war.     

Government deficits, consumption, and the price level

This paper investigates the dynamics of the price level in a continuous time monetary version of the Yaari-Blanchard overlapping generations model with capital accumulation. It is shown that there is an interaction between fiscal discipline and price stability when the government budget is intertemporally balanced. Relevant implications are that high debt and slow adjustment adversely affect both prices and capital accumulation. Received: April 2005, Accepted: November 2005 We are very grateful to Paulo Brito, the editor, and to an anonymous referee for helpful comments. We also thank seminar participants at the University of Rome for useful discussions. Financial support from MIUR is gratefully acknowledged. The usual disclaimer applies.     

Optimal fiscal policy, uncertainty, and growth

This paper analyzes the macroeconomic effects of fiscal policy in a stochastic endogenous growth model. Due to externalities in human capital accumulation, the market allocation is inefficient, thereby justifying government intervention. The uncertainty stemming from technological disturbances affects the growth rate, which can be explained by precautionary motives of risk averse agents. Fiscal policy means consist of a consumption tax, investment subsidies, and bonds. We obtain counter-acting growth effects of investment subsidies, which are differentiated with respect to deterministic and stochastic capital income components. The policy implications from the deterministic model are substantially extended in the stochastic context. A general rule for a welfare maximizing policy is derived, which is represented by a continuum of alternative tax-transfer-schemes. We discuss three benchmark cases, which crucially differ with respect to their implications regarding the size of the government expenditure share.     

Government size,government debt and globalization

This article empirically investigates the effect of globalization on government size and debt. Using panel heterogeneous cointegration techniques to a panel of developing and developed countries, it finds that globalization reduces government size and debt. In terms of components of globalization, government size is found to increase with trade openness but decreases with financial, social and political globalization. On the other hand, government debt increases with financial and trade openness but decreases with social and political globalization. The evidence is robust to different estimation methods and different samples. Our data also indicate unidirectional causality running from globalization measures to government size and debt.     

我国政府性债务与金融体系安全的阈值效应--基于2001-2012年数据的实证研究

我国政府性债务无序扩张对金融体系安全产生何种影响是研究的热点问题。文章构建了包括宏观经济内部安全、宏观经济外部安全、金融市场运行安全3个模块,共计15个指标的金融体系安全指数,并引用2001-2012年的数据进行测度,进而采用数据模拟的方法建立政府性债务和金融体系安全指数的非线性模型。结果发现,我国政府性债务与金融体系安全之间存在阈值效应,时间节点在2010年,阈值为64.6960万亿元,自此以后,金融体系安全指数随政府性债务规模扩大呈现超线性上升趋势,我国政府性债务已经成为威胁金融体系安全的重大隐患,亟需建立有效的约束框架维护金融体系安全。     

Countercyclical taxes in a monopolistically competitive environment

In the context of a neoclassical growth model with monopolistic competition, this paper studies the stabilizing effects of countercyclical tax policy when the income tax rate has an additional role of financing government budget deficits. Consistent with the conventional wisdom, countercyclical taxes generally reduce aggregate volatility, unless the fiscal response to debt accumulation is weak. The presence of monopoly power enhances these effects. Even when automatic stabilizers successfully stabilize business cycle fluctuations, countercyclical taxes are welfare inferior, due to reduced precautionary saving motives. While, if the fiscal response to debt is weak and countercyclical tax policy destabilizing, the increased precautionary saving motive is not welfare enhancing as the asset accumulated is government debt rather than capital. These results are generally robust. Nominal inertia may, however, dominate the precautionary saving mechanism.     

The sustainability of Portuguese fiscal policy from a historical perspective

This paper analyses the sustainability of Portuguese public finances, making use of a long dataset with more than a full century of observations. The use of such a long dataset is appropriate because both the unit root and co-integration tests on which the sustainability testing procedure is based require a long period of data. We find considerable evidence in favor of sustainability for the 1903–2003 period which is not, however, maintained for the more recent 1975–2003 period, as it is characterized by the largest GDP deficit ratios of our sample. This latter period appears to signal a shift to an unsustainable path in Portuguese fiscal policy. Hence, our results suggest that fiscal consolidation efforts must, in fact, be continued in Portugal.Paper presented at the 2004 CESifo-LBI Conference on “Sustainability of Public Debt”, October 22–23 2004, Munich.     

李嘉图等价定理及其在中国的适用性分析

李嘉图等价定理认为,政府的财政收入形式的选择,不会引起人们经济行为的调整。但是,现代经济学家们并非完全同意李嘉图的见解,无论是对其必要条件的检验还是对其结论的检验都存在着争论。而通过实证分析我国1989—2004年的政府发债分别与消费和投资的关系,可以得出结论：从历史数据来看,李嘉图等价定理在我国并不适用。     

Government debt and economic growth in the G7 countries: are there any causal linkages?

This article investigates the direction of Granger-causality between debt and growth in the G7 countries using quarterly data from 1980 to 2013. We analyse the causal structure both in level data using the Toda and Yamamoto causality test, and with differenced data by means of dynamic impulse response analysis. Results indicate that growth causes debt rather than the other way around. We find the effect of growth on debt to be unambiguously negative in all cases of significant causality, but to be a short- to medium-run phenomenon with no lasting impact. We also find that results are sensitive to the sample period, with causality from growth to debt much more prevalent when the sample period includes the recent financial crisis.     

Government risk premiums in the bond market: EMU and Canada

This paper focuses on risk premiums paid by central governments in Europe and sub-national governments in Germany, Spain, and Canada, using data for bond yield spreads for the period 1991–2005. We find that risk premiums by central governments respond positively to debt and deficits; German states enjoyed a favourable position in financial markets before EMU but not thereafter; Spanish and Canadian provinces risk premiums over the whole period; German and Spanish sub-central governments pay liquidity-related interest rate premiums; Canadian and German provinces/states that benefit from fiscal equalization lower spreads. This is evidence of market discipline at work and of credibility of the EU no-bailout clause.     

个人负债与政府负债的比较分析

不管是个人或是政府,负债都是具有一定风险的,如果确需负债,必须在资金使用的监控、披露制度的建设上予以加强,以减少债务风险;做好防范和化解财政风险的预案,以避免对国家宏观经济造成冲击。     

Asset Prices and History: The Case of Austria

Historical events are reflected in asset prices. Looking at Austrian government bond prices traded on the Swiss stock exchange during WWII provides therefore a useful way of interpreting the importance the thousands of people directly and indirectly engaged in stock markets attributed to various war events. An econometric analysis of the relationship between government bond values and events in Austrian history reveals that some generally considered crucial events connected with WWII are clearly reflected in Austrian government bond prices. This holds, in particular for the beginning and the end of the war. The annexation of Austria by Germany in 1938 which seemingly looked as being overwhelmingly and passionately welcomed by the Austrian population negatively affected the evaluation of Austrian government bonds, i.e. it was considered to be to the disadvantage of Austria by the people who put their own personal fortune at risk.     

Public debts,deficits and interest rates in CEECs: are there spatial spillovers?

In this paper we extend the literature on the relationship between public debts, deficits and government bond yields in the following directions: we examine a set of 11 Central and Eastern European countries during the period 2006–2015; we apply a novel econometric technique that allows for spatial effects; and we test forward-looking instead of current values of explanatory variables thus addressing endogeneity problem. We find that there is overall a highly significant positive effect of both public debt and deficit on long-term interest rates. This effect is found to be larger in CEECs than in developed countries. Moreover, deficits are found to exert a large and significant indirect effect, and these spillovers amount to more than 50% of the overall effect.     

关于生育政策调整的若干问题

生育政策调整是目前敏感而备受关注的热点问题之一。就\"允许生两个,就会生三个\"的思维逻辑、就业压力、人口规模、政策生育率和实际生育率、人口预测与生育政策调整之间的关系进行了考察与分析,并就稳定现行生育政策与统筹解决人口问题以及生育政策调整与计生部门职能转变等问题展开了讨论。对人口发展中的越南与海外华人现状作了考察分析。