Can Deficits Finance Themselves?

IF 6.6 1区经济学 Q1 ECONOMICS

Econometrica Pub Date : 2024-09-27 DOI:10.3982/ECTA21791

George-Marios Angeletos, Chen Lian, Christian K. Wolf

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Abstract

We ask how fiscal deficits are financed in environments with two key features: (i) nominal rigidity, and (ii) a violation of Ricardian equivalence due to finite lives or liquidity constraints. In such environments, deficits can contribute to their own financing through two channels: a boom in real economic activity, which expands the tax base; and a surge in inflation, which erodes the real value of nominal government debt. Our main theoretical result establishes that this mechanism becomes more potent as fiscal adjustment is delayed, leading to full self-financing in the limit: if the monetary authority does not lean too heavily against the fiscal stimulus, then the government can run a deficit today, refrain from tax hikes or spending cuts in the future, and still see its debt converge back to its initial level. We further demonstrate that a significant degree of self-financing is achievable when the theory is disciplined by empirical evidence on marginal propensities to consume, nominal rigidities, the monetary policy reaction, and the speed of fiscal adjustment.

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赤字能为自己筹资吗？

我们的问题是，在具有以下两个关键特征的环境中，如何为财政赤字融资？(i) 名义刚性，(ii) 由于生命有限或流动性限制而违反李嘉图等价原则。在这种环境下，赤字可以通过两个渠道为自身融资：一是实体经济活动的繁荣，这可以扩大税基；二是通货膨胀的激增，这可以侵蚀名义政府债务的实际价值。我们的主要理论结果证明，随着财政调整的延迟，这一机制会变得更加有效，从而在极限情况下实现完全的自我融资：如果货币当局不过分倚重财政刺激措施，那么政府今天就可以出现赤字，未来也不会增税或削减支出，而且其债务仍会收敛回初始水平。我们进一步证明，当理论受到边际消费倾向、名义刚性、货币政策反应和财政调整速度等方面的经验证据的约束时，在很大程度上是可以实现自筹资金的。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Econometrica 社会科学-数学跨学科应用

CiteScore

11.00

自引率

3.30%

发文量

审稿时长

6-12 weeks

期刊介绍： Econometrica publishes original articles in all branches of economics - theoretical and empirical, abstract and applied, providing wide-ranging coverage across the subject area. It promotes studies that aim at the unification of the theoretical-quantitative and the empirical-quantitative approach to economic problems and that are penetrated by constructive and rigorous thinking. It explores a unique range of topics each year - from the frontier of theoretical developments in many new and important areas, to research on current and applied economic problems, to methodologically innovative, theoretical and applied studies in econometrics. Econometrica maintains a long tradition that submitted articles are refereed carefully and that detailed and thoughtful referee reports are provided to the author as an aid to scientific research, thus ensuring the high calibre of papers found in Econometrica. An international board of editors, together with the referees it has selected, has succeeded in substantially reducing editorial turnaround time, thereby encouraging submissions of the highest quality. We strongly encourage recent Ph. D. graduates to submit their work to Econometrica. Our policy is to take into account the fact that recent graduates are less experienced in the process of writing and submitting papers.