A Goldilocks Theory of Fiscal Deficits

• 成果类型: Article
• 署名作者: Mian, Atif; Straub, Ludwig; Sufi, Amir
• 署名单位: National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282; 1944-7981
• DOI: 10.1257/aer.20220308
• 发表日期: 2025-12
• 页码: 4253-4291
• 关键词: public debt; monetary-policy; budget deficits; aggregate demand; government debt; interest-rates; Asset bubbles; GROWTH; sustainability; MODEL

摘要

We develop a tractable framework for deficit and debt dynamics. A free lunch fiscal deficit-one that raises spending without higher future taxes-is sustainable without zero lower bound (ZLB) only when R < G-phi, where phi is the sensitivity of the interest rate to the debt level. With the ZLB, both high and low deficits can increase debt, as the latter weaken demand and reduce nominal growth at the ZLB. A rise in income inequality expands fiscal space outside the ZLB, but contracts it at the ZLB. Calibrating the model, we find little space for free lunch policies for the United States in 2019, but significant space for Japan.