The optimum quantity of debt

• 成果类型: Article
• 署名作者: Aiyagari, SR; McGrattan, ER
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Minneapolis; University of Rochester
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(98)00031-2
• 发表日期: 1998
• 页码: 447-469
• 关键词: Government debt; precautionary saving; borrowing constraints

摘要

We find that the welfare gains to being at the optimum quantity of debt rather than the current US level are small, and, therefore, concerns regarding the high level of debt in the US economy may be misplaced. This finding is based on a model of a large number of infinitely lived households whose saving behavior is influenced by precautionary saving motives and borrowing constraints. This model incorporates a different role for government debt than is found in standard models, and it captures different cost-benefit trade-offs. On the benefit side, government debt enhances the liquidity off households by providing an additional means of smoothing consumption and by effectively loosening borrowing constraints. On the cost side, the implied taxes have adverse wealth distribution and incentive effects. In addition, government debt crowds out capital via higher interest rates and lowers per capita consumption. (C) 1998 Elsevier Science B.V. All rights reserved.