The economic effects of restrictions on government budget deficits

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The economic effects of restrictions on government budget deficits

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dc.contributor.author Ghiglino, Christian en_US
dc.contributor.author Shell, Karl en_US
dc.date.accessioned 2009-02-04T10:27:41Z
dc.date.available 2009-02-04T10:27:41Z
dc.date.issued 1998-02-11T00:00:00Z en_US
dc.identifier.uri http://hdl.handle.net/10398/7542
dc.description.abstract In overlapping-generations economies with perfect financial markets and lumpsum taxation, restrictions on the government budget deficits do not limit the set of achievable allocations. For economies in which tax instruments are distortionary and limited in number, deficits are irrelevant only in the unrealistic case in which the number of tax instruments is large relative to the number of policy goals. In particular, if the government can use only anonymous consumption taxes, then achieving the prescribed deficits without changing the equilibrium allocation will typically be impossible when the number of consumers exceeds the number of commodities. A similar result holds if consumer credit is (exogenously) restricted. Surprisingly, in this case, distortionary taxes may be more likely than lump-sum taxes to lead to the irrelevance of government deficits. Journal of Economic Literature Classification Numbers: D51, D91, E32. Keywords: Balanced Budget, Balanced-Budget Amendment, Burden of the Public Debt, Comparative Statics, Consumption Taxes, Credit Restrictions, Distortionary Taxes, Economic Policy, Government Budget Deficit, Maastricht Treaty, Optimal Taxation, Overlapping Generations. en_US
dc.format.extent 39 s. en_US
dc.language eng en_US
dc.relation.ispartofseries Working paper;1998-3 en_US
dc.subject.other engelsksproget en_US
dc.subject.other budgetunderskud en_US
dc.subject.other finanspolitik en_US
dc.subject.other overlapping generation model en_US
dc.title The economic effects of restrictions on government budget deficits en_US
dc.type wp en_US
dc.accessionstatus AAmodt98feb05 KAT98feb11 toje en_US
dc.contributor.corporation Copenhagen Business School. CBS
dc.contributor.department Økonomisk Institut
dc.contributor.departmentshort ECON
dc.contributor.departmentuk Department of Economics
dc.contributor.departmentukshort ECON
dc.idnumber x64486454x en_US
dc.publisher.city København en_US
dc.publisher.year 1998 en_US


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