Managing government debt.
Proc Natl Acad Sci U S A
; 121(11): e2318365121, 2024 Mar 12.
Article
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| MEDLINE
| ID: mdl-38451950
ABSTRACT
To construct a stochastic version of [R. J. Barro, J. Polit. Econ. 87, 940-971 (1979)] normative model of tax rates and debt/GDP dynamics, we add risks and markets for trading them along lines suggested by [K. J. Arrow, Rev. Econ. Stud. 31, 91-96 (1964)] and [R. J. Shiller, Creating Institutions for Managing Society's Largest Economic Risks (OUP, Oxford, 1994)]. These modifications preserve Barro's prescriptions that a government should keep its debt-gross domestic product (GDP) ratio and tax rate constant over time and also prescribe that the government insure its primary surplus risk by selling or buying the same number of shares of a Shiller macro security each period.
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MEDLINE
Asunto principal:
Gobierno
Idioma:
En
Revista:
Proc Natl Acad Sci U S A
Año:
2024
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Article