Managing government debt.
other
Where this comes from
- Record sourced from PubMed, PMID 38451950.
- Also identified by DOI 10.1073/pnas.2318365121 and PMC identifier 10945843.
- Licence recorded as CC BY-NC-ND.
- Because redistribution is not established, this page shows the abstract only. Follow the links below for the full text.
Abstract
To construct a stochastic version of [R. J. Barro, <i>J. Polit. Econ.</i> <b>87</b>, 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, <i>Rev. Econ. Stud.</i> <b>31</b>, 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.
Medical subject headings
- Government