Does monetary unification lead to excessive debt accumulation?

• 成果类型: Article
• 署名作者: Beetsma, RMWJ; Bovenberg, AL
• 署名单位: Vrije Universiteit Amsterdam; University of Amsterdam; Tilburg University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(99)00035-3
• 发表日期: 1999
• 页码: 299-325
• 关键词: common central bank; monetary union; credibility effect; government myopia; price-stability weight; (optimal) debt target; supply shocks

摘要

If discretionary monetary policy gives rise to an inflation bias, monetary unification boosts the accumulation of public debt. The additional debt accumulation harms welfare if governments are sufficiently myopic. In the presence of myopic governments, debt ceilings play a useful role in avoiding excessive debt accumulation in a monetary union and allowing a conservative, independent central bank to focus on price stability. With supply shocks, monetary unification results in excessive variability of public debt. A debt target that constrains stabilization policy helps to prevent this. (C) 1999 Elsevier Science S.A. All rights reserved.