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The Global Transmission of Government Debt
-
Young-Cheol Jung
und
Nguyen V. Quyen
Veröffentlicht/Copyright:
26. Juli 2012
Abstract
The overlapping-generations model à la Diamond is extended into a world of two large open economies to investigate the global transmission effects of government debts. Initially the world economy is in a long-run equilibrium without taxes and government expenditures. The government of one country then makes a transfer to the old generation, and finances the transfer through the issuance of government debts. Thereafter, this government adopts a debt management policy to maintain the debt per young individual at a constant level. The current young generation of the country is better-off if the interest rate is slightly higher than the population growth rate, but is worse-off if the factor share of capital in national income is high. Along the equilibrium path, the welfare of a generation is lower than that of its predecessor in each country. In the long run, the welfare in both countries is lower under the new steady state.
Published Online: 2012-7-26
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Artikel in diesem Heft
- Advances Article
- Life Cycle Dynamics of Income Uncertainty and Consumption
- Immigration, Fiscal Policy, and Welfare in an Aging Population
- Contributions Article
- Who Gets the Credit? And Does It Matter? Household vs. Firm Lending Across Countries
- How Much Did the 2009 Australian Fiscal Stimulus Boost Demand? Evidence from Household-Reported Spending Effects
- Economic Growth and Political Survival
- Exchange Rate Uncertainty and Trade
- Monetary and Macroprudential Policy Rules in a Model with House Price Booms
- A Unified Framework for Using Micro-Data to Compare Dynamic Time-Dependent Price-Setting Models
- Government Policy Response to War-Expenditure Shocks
- Poverty Traps and Growth in a Model of Endogenous Time Preference
- Where Has All the Money Gone? Foreign Aid and the Composition of Government Spending
- Great Spending Crashes
- Capital Utilization and the Amplification Mechanism
- Topics Article
- Unemployment Expectations and the Business Cycle
- Sector-Specific Capital, Labor Market Distortions and Cross-Country Income Differences: A Two-Sector General Equilibrium Approach
- A Dynamic Theory of Competence, Loyalty and Stability in Dictatorships
- Coordination Failure in Investment, Economic Growth, and Volatility
- Openness, Imported Commodities and the Sacrifice Ratio
- Consumption, Leisure and Borrowing Constraints
- A Credibility Proxy: Tracking US Monetary Developments
- Estimating Information Rigidity Using Firms' Survey Data
- Has the Fed Reacted Asymmetrically to Stock Prices?
- News Shocks, Productivity and the U.S. Investment Boom-Bust Cycle
- A Supply-Demand Framework for Understanding the U.S. Gender Gap in Education
- Misallocation and Manufacturing TFP in Bolivia during the Market Liberalization Period
- Government Debt Dynamics Under Discretion
- The Global Transmission of Government Debt
- Is Discretionary Fiscal Policy in Japan Effective?
- The Laffer Curve in a Frictional Labor Market
- Nonexponential Discounting: A Direct Test And Perhaps A New Puzzle
- International Transmission of Medium-Term Technology Cycles: Evidence from Spain as a Recipient Country
- Phases of Economic Development: Do Initial Endowments Matter?
Schlagwörter für diesen Artikel
OLG model;
transfer;
government debt;
capital-labor ratio;
current account;
welfare
Artikel in diesem Heft
- Advances Article
- Life Cycle Dynamics of Income Uncertainty and Consumption
- Immigration, Fiscal Policy, and Welfare in an Aging Population
- Contributions Article
- Who Gets the Credit? And Does It Matter? Household vs. Firm Lending Across Countries
- How Much Did the 2009 Australian Fiscal Stimulus Boost Demand? Evidence from Household-Reported Spending Effects
- Economic Growth and Political Survival
- Exchange Rate Uncertainty and Trade
- Monetary and Macroprudential Policy Rules in a Model with House Price Booms
- A Unified Framework for Using Micro-Data to Compare Dynamic Time-Dependent Price-Setting Models
- Government Policy Response to War-Expenditure Shocks
- Poverty Traps and Growth in a Model of Endogenous Time Preference
- Where Has All the Money Gone? Foreign Aid and the Composition of Government Spending
- Great Spending Crashes
- Capital Utilization and the Amplification Mechanism
- Topics Article
- Unemployment Expectations and the Business Cycle
- Sector-Specific Capital, Labor Market Distortions and Cross-Country Income Differences: A Two-Sector General Equilibrium Approach
- A Dynamic Theory of Competence, Loyalty and Stability in Dictatorships
- Coordination Failure in Investment, Economic Growth, and Volatility
- Openness, Imported Commodities and the Sacrifice Ratio
- Consumption, Leisure and Borrowing Constraints
- A Credibility Proxy: Tracking US Monetary Developments
- Estimating Information Rigidity Using Firms' Survey Data
- Has the Fed Reacted Asymmetrically to Stock Prices?
- News Shocks, Productivity and the U.S. Investment Boom-Bust Cycle
- A Supply-Demand Framework for Understanding the U.S. Gender Gap in Education
- Misallocation and Manufacturing TFP in Bolivia during the Market Liberalization Period
- Government Debt Dynamics Under Discretion
- The Global Transmission of Government Debt
- Is Discretionary Fiscal Policy in Japan Effective?
- The Laffer Curve in a Frictional Labor Market
- Nonexponential Discounting: A Direct Test And Perhaps A New Puzzle
- International Transmission of Medium-Term Technology Cycles: Evidence from Spain as a Recipient Country
- Phases of Economic Development: Do Initial Endowments Matter?
