On the Limitations of Government Borrowing: A Framework for Empirical Testing
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This paper showed that the postwar US deficits are largely consistent with the proposition that the government budget must be balanced in present-value terms, which is mathematically equivalent to testing whether a continuing currency inflation might be fueled by speculation alone or is instead driven solely by economic fundamentals.Abstract:
This paper seeks to distinguish empirically between two views on the limitations of government borrowing According to one view, nothing precludes the government from running a permanent budget deficit, paying interest due on the growing debt load simply by issuing new debt, An alternative perspective holds that creditors would be unwilling to purchase government debt unless the government made a credible commitment to balance its budget in present value terms We show that distinguishing between these possibilities is mathematically equivalent to testing whether a continuing currency inflation might be fueled by speculation alone or is instead driven solely by economic fundamentals Empirical tests which have been developed for this economic question lead us to conclude that postwar US deficits are largely consistent with the proposition that the government budget must be balanced in present-value termsread more
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Monetary Theory and Policy
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An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output
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The Behavior of U. S. Public Debt and Deficits
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An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output
TL;DR: In this paper, the authors characterize the dynamic effects of shocks in government spending and taxes on economic activity in the United States in the post-war period using a mixed structural VAR/event study approach.
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Distribution of the Estimators for Autoregressive Time Series with a Unit Root
David A. Dickey,Wayne A. Fuller +1 more
TL;DR: In this article, the limit distributions of the estimator of p and of the regression t test are derived under the assumption that p = ± 1, where p is a fixed constant and t is a sequence of independent normal random variables.
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Are Government Bonds Net Wealth
TL;DR: In this article, the authors consider the effects of different types of intergenerational transfer schemes on the stock of public debt in the context of an overlapping-generations model and show that finite lives will not be relevant to the capitalization of future tax liabilities so long as current generations are connected to future generations by a chain of operative inter-generational transfers.
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Introduction to Statistical Time Series
TL;DR: In this paper, Fourier analysis is used to estimate the mean and autocorrelations of the Fourier spectral properties of a Fourier wavelet and the estimated spectrum of the wavelet.
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Debt, Deficits and Finite Horizons
TL;DR: In this article, the effects of the horizon index on the steady state interest rate and the dynamic effects of government deficit finance on the economic system were investigated and a simple analytical model was developed in which the horizon of agents is a parameter which can be chosen arbitrarily.
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