Debt and deficit fluctuations in a time-consistent setup
Grechyna, Daryna (2015) Debt and deficit fluctuations in a time-consistent setup. Macroeconomic Dynamics . ISSN 1365-1005 (Accepted/In press)
- Final accepted version (with author's formatting)
Download (355kB) | Preview
This paper compares the stochastic behavior of fiscal variables under optimal fiscal policy for the cases of full commitment by the government (Ramsey problem) and no commitment by the government (focusing on differentiable Markov perfect equilibrium). It shows that the cyclical properties of fiscal variables are similar for both commitment assumptions.
These conclusions are robust to two different specifications of the structure of public bonds (risk-free and state-contingent), and to different sets of the parameters. The cyclical properties of fiscal variables, regardless of commitment assumptions, can be determined by the parameters of the utility function.
|Research Areas:||A. > Business School > Economics|
|Depositing User:||Daryna Grechyna|
|Date Deposited:||07 Apr 2015 13:21|
|Last Modified:||06 Dec 2016 07:51|
Actions (login required)