Fiscal Policy with Non-Contingent Debt and the Optimal Maturity Structure
作者： George-Marios Angeletos
DOI: 10.2139/SSRN.252568
关键词:
摘要: Two puzzling observations have motivated this paper: First, the standard paradigm of optimal fiscal policy, following Lucas & Stokey (1983), assumes counterfactually that public debt is held in state-contingent securities. Is existing theory as irrelevant it silent about policy with non-contingent debt? Second, when assumed state-contingent, maturity structure for tax smoothing and thus indeterminate. Are we left no structure? The resolution propose to both puzzles reassuring: We show can substitute debt. Our argument exploits endogenous state dependence equilibrium term interest rates. In general implement almost every Arrow-Debreu allocation just This turn provides us a novel
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