Public Debt and Total Factor Productivity

Kaas, Leo

Public Debt and Total Factor Productivity

Dateien

Kaas_0-276501.pdfGröße: 506.13 KBDownloads: 334

Datum

2014

Open Access-Veröffentlichung

Open Access Green

Sammlungen

Wirtschaftswissenschaften

Publikationstyp

Working Paper/Technical Report

Publikationsstatus

Published

Zusammenfassung

This paper explores the role of public debt and fiscal deficits on factor productivity in an economy with credit market frictions and heterogeneous firms. When credit market conditions are sufficiently weak, low interest rates permit the government to run Ponzi schemes so that permanent primary deficits can be sustained. For small enough deficit ratios, the model has two steady states of which one is an unstable bubble and the other one is stable. The stable equilibrium features higher levels of credit and capital, but also a lower interest rate, lower total factor productivity and output. The model is calibrated to the US economy to derive the maximum sustain- able deficit ratio and to examine the dynamic responses to changes in debt policy. A reduction of the primary deficit triggers an expansion of credit and capital, but it also leads to a deterioration of total factor productivity since more low-productivity firms prefer to remain active at the lower equilibrium interest rate.

Fachgebiet (DDC)

330 Wirtschaft

Schlagwörter

Credit constraints; Unbacked public debt; Dynamic inefficiency; Sustainable deficits

Zitieren

ISO 690

KAAS, Leo, 2014. Public Debt and Total Factor Productivity

BibTex

@techreport{Kaas2014Publi-29886,
  year={2014},
  series={Working Paper Series / Department of Economics},
  title={Public Debt and Total Factor Productivity},
  number={2014-22},
  author={Kaas, Leo}
}

RDF

<rdf:RDF
    xmlns:dcterms="http://purl.org/dc/terms/"
    xmlns:dc="http://purl.org/dc/elements/1.1/"
    xmlns:rdf="http://www.w3.org/1999/02/22-rdf-syntax-ns#"
    xmlns:bibo="http://purl.org/ontology/bibo/"
    xmlns:dspace="http://digital-repositories.org/ontologies/dspace/0.1.0#"
    xmlns:foaf="http://xmlns.com/foaf/0.1/"
    xmlns:void="http://rdfs.org/ns/void#"
    xmlns:xsd="http://www.w3.org/2001/XMLSchema#" > 
  <rdf:Description rdf:about="https://kops.uni-konstanz.de/server/rdf/resource/123456789/29886">
    <foaf:homepage rdf:resource="http://localhost:8080/"/>
    <dc:date rdf:datatype="http://www.w3.org/2001/XMLSchema#dateTime">2015-02-19T10:21:32Z</dc:date>
    <bibo:uri rdf:resource="http://kops.uni-konstanz.de/handle/123456789/29886"/>
    <dcterms:abstract xml:lang="eng">This paper explores the role of public debt and fiscal deficits on factor productivity in an economy with credit market frictions and heterogeneous firms. When credit market conditions are sufficiently weak, low interest rates permit the government to run Ponzi schemes so that permanent primary deficits can be sustained. For small enough deficit ratios, the model has two steady states of which one is an unstable bubble and the other one is stable. The stable equilibrium features higher levels of credit and capital, but also a lower interest rate, lower total factor productivity and output. The model is calibrated to the US economy to derive the maximum sustain- able deficit ratio and to examine the dynamic responses to changes in debt policy. A reduction of the primary deficit triggers an expansion of credit and capital, but it also leads to a deterioration of total factor productivity since more low-productivity firms prefer to remain active at the lower equilibrium interest rate.</dcterms:abstract>
    <void:sparqlEndpoint rdf:resource="http://localhost/fuseki/dspace/sparql"/>
    <dc:contributor>Kaas, Leo</dc:contributor>
    <dc:rights>terms-of-use</dc:rights>
    <dcterms:isPartOf rdf:resource="https://kops.uni-konstanz.de/server/rdf/resource/123456789/46"/>
    <dcterms:rights rdf:resource="https://rightsstatements.org/page/InC/1.0/"/>
    <dc:creator>Kaas, Leo</dc:creator>
    <dspace:hasBitstream rdf:resource="https://kops.uni-konstanz.de/bitstream/123456789/29886/3/Kaas_0-276501.pdf"/>
    <dspace:isPartOfCollection rdf:resource="https://kops.uni-konstanz.de/server/rdf/resource/123456789/46"/>
    <dc:language>eng</dc:language>
    <dcterms:title>Public Debt and Total Factor Productivity</dcterms:title>
    <dcterms:available rdf:datatype="http://www.w3.org/2001/XMLSchema#dateTime">2015-02-19T10:21:32Z</dcterms:available>
    <dcterms:issued>2014</dcterms:issued>
    <dcterms:hasPart rdf:resource="https://kops.uni-konstanz.de/bitstream/123456789/29886/3/Kaas_0-276501.pdf"/>
  </rdf:Description>
</rdf:RDF>

Universitätsbibliographie

Ja