A comparison of nominal and indexed debt under fiscal constraints

Autor:	Ed Westerhout, Roel Beetsma
Přispěvatelé:	Department of Tax Economics, Fiscal Institute Tilburg (FIT), Macro & International Economics (ASE, FEB), Faculteit Economie en Bedrijfskunde
Jazyk:	angličtina
Rok vydání:	2019
Předmět:	Inflation Economics and Econometrics nominal debt Indexed debt media_common.quotation_subject Monetary economics Maturity (finance) Tax revenue Public consumption Debt Economics Debt maturity Welfare Constraint (mathematics) Finance media_common
Zdroj:	Journal of International Money and Finance, 91, 177-194. ELSEVIER SCI LTD Journal of International Money and Finance, 91, 177-194. Elsevier
ISSN:	0261-5606
DOI:	10.1016/j.jimonfin.2018.12.006
Popis:	This paper makes a welfare comparison between the issuance of price-indexed and nominal public debt in the presence of fiscal constraints, viz. a debt constraint, a deficit constraint and a combination of both. Distortionary taxes or public consumption are regulated to avoid the violation of the relevant fiscal constraint(s). Under a debt constraint indexed debt is generally preferred, while under a deficit constraint the results are more mixed. Introducing inflation persistence and raising the maturity of the debt tend to increase the magnitude of the welfare differences between the two types of debt. Welfare differences are further affected by the degree to which public consumption and tax revenues are indexed to actual versus structural nominal GDP.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::f7084f56ee89de481317020394bccf05 https://doi.org/10.1016/j.jimonfin.2018.12.006 Zobrazit plný text záznamu Full Text from ScienceDirect