Đăng ký Đăng nhập
Trang chủ Sách - Truyện đọc Truyện thiếu nhi [alfred_greiner,_bettina_fincke_(auth.)...

Tài liệu [alfred_greiner,_bettina_fincke_(auth.)

.PDF
284
685
98

Mô tả:

Alfred Greiner · Bettina Fincke Public Debt, Sustainability and Economic Growth Theory and Empirics Public Debt, Sustainability and Economic Growth Alfred Greiner • Bettina Fincke Public Debt, Sustainability and Economic Growth Theory and Empirics 123 Alfred Greiner Faculty of Economics Bielefeld University Bielefeld Germany Bettina Fincke Faculty of Economics Bielefeld University Bielefeld Germany ISBN 978-3-319-09347-5 ISBN 978-3-319-09348-2 (eBook) DOI 10.1007/978-3-319-09348-2 Springer Cham Heidelberg New York Dordrecht London Library of Congress Control Number: 2014952604 © Springer International Publishing Switzerland 2015 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com) Preface The financial crises that had begun as a sub-prime crisis in the USA in 2007 had plunged a great many economies throughout the world into deep economic recessions. It seemed that the slump had been overcome by 2010 when some countries reached their pre-crisis level of production. However, the sub-prime crisis turned into a public debt crisis because the bail-out of private financial institutions by governments led to a drastic increase of national debt to GDP ratios in some countries. Particularly in the euro area, economies still face severe problems and must be supported by other countries. This illustrates drastically that public debt does affect the evolution of market economies and the question arises which mechanisms one can identify that make public debt influence the real side of an economy. Whereas economic consequences of taxation can be readily derived, that does not hold for public debt since the latter does not have immediate consequences as concerns the allocation of resources. With this book, we intend to contribute to the research on how public debt affects the growth process of market economies in the medium- to long-run. In particular, we want to work out the mechanisms that make public debt affect the allocation of resources and that are not so easily understood as the economic effects of distortionary taxation. Our book partly builds on papers by ourselves and extends our earlier book (Greiner and Fincke 2009). Thus, we develop new theoretical models of endogenous growth, we update empirical estimations and we present new empirical evidence as regards the relation between public debt and economic growth. The advantage of a monograph, compared to publications in the form of research papers, is that a book publication allows to get more into the details and also to be more precise about the effects that ensue when certain assumptions are changed and replaced by other ones, so that one can say more about the robustness of the results derived. Moreover, this book works out fundamental properties of public debt within basic models of endogenous economic growth. Therefore, it is also suited as a textbook for graduate students studying the relation between public debt, public deficits and the allocation of resources in an intertemporal context. We also owe our thanks to Peter Flaschel, v vi Preface Göran Kauermann, Uwe Köller and Willi Semmler from whom we have benefited through earlier joint work and stimulating discussions. Further, we are indebted to Gaby Windhorst for typing some sections of the manuscript. Parts of the material in this book have been presented at conferences, workshops and university seminars. Valuable comments that are gratefully acknowledged were provided by participants in the International Workshop on Advances in Macrodynamics at Bielefeld University, in the Conference on The Institutional and Social Dynamics of Growth and Distribution, Lucca, Italy, in the World Bank workshop on Modeling Fiscal Policy, Public Expenditure and Growth Linkages, Washington, D.C., in the Symposium on Nonlinear Dynamics and Econometrics, London, in the Workshop on Public Debt and Economic Growth of the European Commission, Economic and Financial Affairs, Brussels, in the DIW annual workshop on macroeconometric modelling, Berlin, at the UECE Conference on Economic and Financial Adjustments in Europe, Lisbon, at the SPERI Annual Conference Beyond Austerity vs Growth: The Future of the European Political Economy, Sheffield, as well as in seminars at the Université du Luxembourg, at the Vienna University of Technology and at the Université Paris 1 Panthéon-Sorbonne. Bielefeld, Germany June 2014 Alfred Greiner Bettina Fincke Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 1 2 Sustainable Public Debt: Theory and Empirical Evidence . . . . . . . . . . . . . . 2.1 Theoretical Considerations . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.1.1 Public Debt and the Primary Surplus . . . . . .. . . . . . . . . . . . . . . . . . . . 2.1.2 Conditions for Sustainability of Public Debt .. . . . . . . . . . . . . . . . . 2.2 Empirics: Japan, Germany and the USA . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.2.1 Descriptive Historical Approach .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.2.2 Empirical Approach . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.3 Empirical Results for Euro Area Countries . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.3.1 France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.3.2 Ireland, Portugal and Spain.. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.3.3 Greece and Italy.. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.4 The Impact of the 2007 Financial Crisis: Portugal and Spain . . . . . . . . 2.5 Empirical Evidence for Developing Countries . . . .. . . . . . . . . . . . . . . . . . . . 2.5.1 The Estimation Strategy .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2.5.2 Estimation Results . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Conclusion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 5 5 6 7 11 12 15 29 31 32 33 35 43 44 45 67 71 3 Debt and Growth: A Basic Endogenous Growth Model . . . . . . . . . . . . . . . . 3.1 The Growth Model .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.1.1 The Household Sector . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.1.2 The Productive Sector . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.1.3 The Government . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.1.4 Analysis of the Model Structure . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.1.5 Welfare Effects of Debt Policy .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.2 Debt Cycles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.2.1 Structure of the Model .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.2.2 The Differential Equations . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 81 83 83 84 85 86 94 97 97 99 vii viii Contents 3.2.3 Balanced Government Budget . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.2.4 Permanent Public Deficits . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.3 The Interaction of Fiscal and Monetary Policy .. . .. . . . . . . . . . . . . . . . . . . . 3.3.1 The Household Sector . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.3.2 The Productive Sector . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.3.3 The Public Sector . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.3.4 The Balanced Growth Path . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.3.5 Analysis of the Model . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.4 Effects of Wage Rigidities and Unemployment . . .. . . . . . . . . . . . . . . . . . . . 3.4.1 The Structure of the Growth Model.. . . . . . .. . . . . . . . . . . . . . . . . . . . 3.4.2 The Balanced Growth Path . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 3.4.3 Stability of the Economy . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Conclusion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 100 101 105 106 108 108 109 110 116 118 122 126 128 131 4 Productive Government Spending, Public Debt and Growth . . . . . . . . . . 4.1 The Endogenous Growth Model with Full Employment .. . . . . . . . . . . . . 4.1.1 Households .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.1.2 Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.1.3 The Government . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.1.4 Equilibrium Conditions and the Balanced Growth Path . . . . . . 4.1.5 Analyzing the Model . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.2 Effects of a Progressive Income Tax . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.2.1 The Model.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.2.2 The Household and the Productive Sector .. . . . . . . . . . . . . . . . . . . . 4.2.3 Implications of the Model . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.3 Productive Public Spending as a Flow . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.3.1 The Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.3.2 The Government . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.3.3 Analysis of the Model . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.4 The Role of Wage Rigidity and Unemployment.. .. . . . . . . . . . . . . . . . . . . . 4.4.1 The Endogenous Growth Model . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.4.2 Analysis of the Model with Wage Flexibility . . . . . . . . . . . . . . . . . 4.4.3 The Model with Wage Rigidities. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4.4.4 Discussion and Comparison to the Model Without Unemployment .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Conclusion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 147 149 149 150 150 151 153 161 162 162 165 169 169 170 171 177 177 183 188 5 Government Debt and Human Capital Formation . .. . . . . . . . . . . . . . . . . . . . 5.1 The Structure of the Growth Model with Human Capital .. . . . . . . . . . . . 5.1.1 The Household and the Productive Sector .. . . . . . . . . . . . . . . . . . . . 5.1.2 Human Capital Formation .. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 5.1.3 The Government . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 5.1.4 Equilibrium Conditions and the Balanced Growth Path . . . . . . 5.1.5 Analysis of the Model . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 205 206 206 208 208 209 210 190 192 195 Contents ix 5.2 A More Elaborate Model with Human Capital . . . .. . . . . . . . . . . . . . . . . . . . 5.2.1 The Structure of the Growth Model.. . . . . . .. . . . . . . . . . . . . . . . . . . . 5.2.2 Analyzing the Model . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Conclusion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 215 216 221 227 229 6 Debt and Growth: Empirical Evidence . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 6.1 The Estimation Procedure and the Data. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 6.2 Estimation Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Conclusion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 233 235 238 244 7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 245 A Non-parametric Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 249 B Basic Theorems from Optimal Control Theory . . . . . .. . . . . . . . . . . . . . . . . . . . 251 C The Hopf Bifurcation Theorem . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 255 Data Sources .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 257 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 259 Index . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 267 List of Figures Fig. 2.1 Fig. 2.2 Fig. 2.3 Fig. 2.4 Fig. 2.5 Fig. 2.6 Fig. 2.7 Fig. 2.8 Fig. 2.9 Fig. 2.10 Fig. 2.11 Fig. 2.12 Fig. 2.13 Fig. 2.14 Fig. 2.15 Fig. 2.16 Fig. 2.17 Japanese National government debt as percentage of GDP (1955–2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . German National government debt as percentage of GDP (1950–2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . US Federal debt at the end of year as percentage of GDP (1940–2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Deviation sm.t/ from the average coefficient for b.t  1/ for Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . General government net financial liabilities, Japan (1970–2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Deviation sm.t/ from the average coefficient for b.t  1/ accounting for assets for Japan . . . .. . . . . . . . . . . . . . . . . . . . Deviation sm.t/ from the average coefficient for b.t  1/ for Germany . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Deviation sm.t/ from the average coefficient for b.t  1/ for the US . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Iberian interest rates compared to German bonds (1979–2012) in % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Primary surplus to GDP ratio for Portugal and Spain . . . . . . . . . . . . . . Debt to GDP ratio for Portugal and Spain . . . . . .. . . . . . . . . . . . . . . . . . . . Primary surplus and debt to GDP ratio for Spain (1980–2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Primary surplus and debt ratio for Spain (1980–2012) separated by decades . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Smooth term Portugal . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Smooth term Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Public debt to GDP ratio for Botswana (1978–2003) . . . . . . . . . . . . . . Primary surplus to GDP ratio for Botswana (1978–2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 12 13 15 18 19 21 23 25 36 37 37 38 39 42 42 46 46 xi xii List of Figures Fig. 2.18 Deviation sm(t) from the average coefficient for b.t 1/ for Botswana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.19 Budget deficit of Botswana (1978–2003) . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.20 Public debt to GDP ratio for Costa Rica (1970–2002) . . . . . . . . . . . . . Fig. 2.21 Primary surplus to GDP ratio for Costa Rica (1970–2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.22 Deviation sm(t) from the average coefficient for b.t 1/ for Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.23 Budget deficit of Costa Rica (1970–2002) . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.24 Public debt to GDP ratio for Mauritius (1973–2005) . . . . . . . . . . . . . . Fig. 2.25 Primary surplus to GDP ratio for Mauritius (1973–2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.26 Deviation sm(t) from the average coefficient for b.t 1/ for Mauritius . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.27 Budget deficit of Mauritius (1973–2005) . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.28 Public debt to GDP ratio for Panama (1970–2000) . . . . . . . . . . . . . . . . Fig. 2.29 Primary surplus to GDP ratio for Panama (1970–2000) . . . . . . . . . . . Fig. 2.30 Deviation sm(t) from the average coefficient for b.t 1/ for Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.31 Budget deficit of Panama (1970–2000) . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.32 Public debt to GDP ratio for Rwanda (1978–2004) . . . . . . . . . . . . . . . . Fig. 2.33 Primary surplus to GDP ratio for Rwanda (1978–2004) . . . . . . . . . . . Fig. 2.34 Deviation sm(t) from the average coefficient for b.t 1/ for Rwanda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.35 Budget deficit of Rwanda (1978–2004) . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.36 Rwanda’s received grants relative to GDP (1978–2004) . . . . . . . . . . . Fig. 2.37 Public debt to GDP ratio for Tunisia (1972–1998) . . . . . . . . . . . . . . . . . Fig. 2.38 Primary surplus to GDP ratio for Tunisia (1972–1998).. . . . . . . . . . . . Fig. 2.39 Deviation sm(t) from the average coefficient for b.t 1/ for Tunisia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.40 Budget deficit of Tunisia (1972–1998) . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Fig. 2.41 Plot of variables and smooth term sm(t) for France . . . . . . . . . . . . . . . . Fig. 2.42 Plot of variables and smooth term sm(t) for Ireland .. . . . . . . . . . . . . . . Fig. 2.43 Plot of variables and smooth term sm(t) for Portugal . . . . . . . . . . . . . . Fig. 2.44 Plot of variables and smooth term sm(t) for Spain . . . . . . . . . . . . . . . . . Fig. 2.45 Plot of variables and smooth term sm(t) for Greece . . . . . . . . . . . . . . . . Fig. 2.46 Plot of variables and smooth term sm(t) for Italy . . . . . . . . . . . . . . . . . . 48 49 50 50 52 53 53 54 55 56 57 57 58 60 60 61 62 63 64 64 65 66 67 74 75 76 77 78 79 Fig. 3.1 Limit cycle in the .b  z  c/ phase space with D 3:7127  103 . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 104 Fig. 4.1 Transitional growth rates of consumption, private capital and public capital after a transition from scenario (iii) to scenario (i) at t D 0 .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 158 Average tax rate (constant) and marginal tax rate (rising) as a function of  . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 168 Fig. 4.2 List of Figures xiii Fig. 4.3 Fig. 4.4 Two saddle point stable BGPs for 1= > 1,  > 0 . . . . . . . . . . . . . . . . . 175 Limit cycle in the .x  b  c/ phase space. . . . . .. . . . . . . . . . . . . . . . . . . . 187 Fig. 6.1 Fig. 6.2 Fig. 6.3 Fig. 6.4 Fig. 6.5 Fig. 6.6 Fig. 6.7 Fig. 6.8 Three-years growth rate . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Public debt to GDP ratio . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Pool, q D 5.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Pool, q D 3.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Pool, q D 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Spline, q D 5.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Spline, q D 3.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Spline, q D 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 236 237 239 240 240 241 241 242 List of Tables Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 2.5 Table 2.6 Table 2.7 Table 2.8 Table 2.9 Table 2.10 Table 2.11 Table 2.12 Table 2.13 Table 2.14 Table 2.15 Table 2.16 Table 2.17 Table 2.18 Table 2.19 Table 2.20 Table 2.21 Equation (2.9) for Japan . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) without YVar, Japan . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) without GVar, Japan .. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) with b only, Japan . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) for Japan (net debt) .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Without YVar, JAP (net debt) .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Without GVar, JAP (net debt) . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . With b only, JAP (net debt) .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) for Germany . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) without YVar, GER . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) without GVar, GER . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) with b only, GER . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) for the USA . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) without YVar, USA . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) without GVar, USA . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Equation (2.9) with b only, USA . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . ADF test for Japan (gross debt) . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . ADF test for Japan (net debt) .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . ADF test for the USA . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . ADF test for Germany . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Coefficients for Eq. (2.14) for France with data from 1975 to 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.22 Coefficients for Eq. (2.14) for Ireland with data from 1975 to 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.23 Coefficients for Eq. (2.14) for Portugal with data from 1977 to 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.24 Coefficients for Eq. (2.14) for Spain with data from 1980 to 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 17 17 18 18 20 20 20 20 22 22 22 22 24 24 24 24 28 28 28 28 31 33 33 33 xv xvi List of Tables Table 2.25 Coefficients for Eq. (2.14) for Greece with data from 1976 to 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.26 Coefficients for Eq. (2.14) for Italy with data from 1972 to 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.27 Interest rate and growth rate gap for Portugal and Spain .. . . . . . . . . Table 2.28 Estimation results Spain (1980–2010) . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.29 Estimation results Spain (1980–2011) . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.30 Estimation results Portugal . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.31 Estimation results Spain . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.32 Coefficients for Eq. (2.16) for Botswana . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.33 ADF test results for Botswana. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.34 Coefficients for Eq. (2.16) for Costa Rica. . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.35 ADF test results for Costa Rica . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.36 Coefficients for Eq. (2.16) for Mauritius . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.37 ADF test results for Mauritius .. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.38 Coefficients for Eq. (2.16) for Panama .. . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.39 ADF test results for Panama .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.40 Coefficients for Eq. (2.16) for Rwanda. . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.41 ADF test results for Rwanda . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.42 Coefficients for Eq. (2.16) for Tunisia . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 2.43 ADF test results for Tunisia . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 3.7 Table 3.8 Table 3.9 Welfare F for the different budgetary rules with  D 0:25 and b.0/ D 0:32 . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . The balanced growth rate, g, the debt to capital ratio, v, and the inflation rate, , for different values of the reaction coefficient, , on the BGP . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . The balanced growth rate, g, the debt to capital ratio, v, and the inflation rate, , for different values of the nominal money growth rate, , on the BGP . . .. . . . . . . . . . . . . . . . . . . . The balanced growth rate, g, the debt to capital ratio, v, and the inflation rate, , for different nominal money growth rates, , on the BGP with a balanced government budget .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Welfare, F , for different nominal money growth rates, , with a balanced government budget . .. . . . . . . . . . . . . . . . . . . . Welfare, F , for different values of the nominal money growth rate,  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Welfare, F , for different values of the reaction coefficient, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Welfare, F , for a balanced government budget compared to permanent deficits . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Welfare F for the different budgetary rules with  D 0:25 and b.0/ D 0:5. .. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 34 34 36 40 40 41 41 47 48 51 52 55 56 58 59 61 62 65 66 96 112 113 114 115 115 115 116 137 List of Tables xvii Table 3.10 Welfare F for the different budgetary rules with  D 1 and b.0/ D 0:32. .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 137 Table 3.11 Welfare F for the different budgetary rules with  D 1 and b.0/ D 0:5 . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 138 Table 4.1 Balanced growth rate and the debt to private capital ratio for different  with D 0:05 . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 4.2 Balanced growth rate and the debt to private capital ratio for different  with D 0:25 . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 4.3 Welfare in scenario (iii) and welfare resulting from a transition to scenario (ii) and scenario (i), respectively . . . . . . . . . Table 4.4 Welfare in scenario (i) and welfare resulting from a transition to scenario (iii) with b ? > 0 . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 4.5 Welfare in scenario (i), scenario (ii) and scenario (iii) for given initial conditions x.0/ D 0:03 and b.0/ D 0:02 . . . . . . . . Table 4.6 Long-run growth rate, endogenous variables on the BGP and eigenvalues for different values of " and with  D 0:015 . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 4.7 Long-run growth rate, endogenous variables on the BGP and eigenvalues for different values of " and with  D 0:015.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 4.8 BGPs for 1= < 1 and  < 0 . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 4.9 Balanced growth rate, g, and eigenvalues for different  with D 0:01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 4.10 Balanced growth rate, g, and eigenvalues for different  with D 0:05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Table 4.11 Balanced growth rate, g, unemployment rate, u, and eigenvalues for different values of  with D 0:01 . . . . . . . . . Table 4.12 Balanced growth rate, g, unemployment rate, u, and eigenvalues for different values of  with D 0:05 . . . . . . . . . Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 5.5 Long-run growth rate and endogenous variables on the BGP for different  and small values of with ˇh D 0:75 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Long-run growth rate and endogenous variables on the BGP for different  and small values of with ˇh D 0:5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Long-run growth rate and endogenous variables on the BGP for different  and large values of with ˇh D 0:75 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Long-run growth rate and endogenous variables on the BGP for different  and large values of with ˇh D 0:5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Welfare in scenario (i), scenario (ii), and scenario (iii) for given initial conditions q.0/ D 0:0032; p.0/ D 0:1; z.0/ D 0:035 . . .. . . . . . . . . . . . . . . . . . . . 156 157 160 160 161 168 169 176 186 186 189 190 212 212 213 213 227 xviii Table 5.6 Table 5.7 Table 5.8 Table 6.1 Table 6.2 Table 6.3 Table 6.4 Table 6.5 List of Tables Welfare in scenario (iii) on the BGP and welfare resulting from a transition to scenario (ii), and scenario (i), respectively .. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 227 Balanced growth rate, g, debt to capital ratio on the BGP, b ? , and the signs of the eigenvalues of the Jacobian for different values of and  .. . . . . . . . . . . . . . . . . . . 232 Balanced growth rate, g, growth rate of public debt, gb , and the signs of the eigenvalues of the Jacobian for  D 0 and for different values of . . . . . . . .. . . . . . . . . . . . . . . . . . . . 232 Plain panel estimation results. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Spline estimation results, plain model . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Panel estimation results, pooled OLS . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . Panel estimation results, random effects . . . . . . .. . . . . . . . . . . . . . . . . . . . Model selection tests . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 239 241 242 243 244 Chapter 1 Introduction After World War II, in particular during the 1970s, the politico-economic principles had been largely dominated by the Keynesian approach according to which governments must play an active role in stabilizing market economies. The latter can be achieved by public expenditures in order to raise aggregate demand, with the spending being financed by public deficits. Particularly, in times of low aggregate demand and high unemployment the government must become active in order to restore the full employment equilibrium which, then, allows to reduce outstanding public debt. In addition, according to that view public debt does not pose a problem if the government runs into debt in the home country. This holds because no resources are lost and public deficits just imply a reallocation of resources from taxpayers to bondholders. Another reason to resort to debt-financing is inter-generational redistribution. The aspect of inter-generational redistribution is also the justification for the so-called golden rule of public finance. According to that rule, governments should finance public investments that yield long-term benefits by public deficits in order to make future generations contribute to the financing. Since future generations will benefit from today’s investment, their contribution to the financing is justified. Otherwise, the current generation would have to bear all the costs but benefit only to a certain degree which is considered as unfair. As a consequence of the predominant Keynesian view, public debt rose considerably in the fourth quarter of the last century and, what is more, the increase in public debt was even larger than the growth rate of the gross domestic product (GDP), mainly in many European countries, so that the ratio of public debt to GDP grew, too. Even in the euro area, where countries participating in the European Economic and Monetary Union have signed the Maastricht treaty stating that the public deficit and the public debt relative to GDP must not exceed 3 and 60 %, respectively, quite a many economies have difficulties with their debt service and some even had to be bailed out by the European Stability Mechanism to prevent bankruptcy. This raises the question of whether and, more generally, under © Springer International Publishing Switzerland 2015 A. Greiner, B. Fincke, Public Debt, Sustainability and Economic Growth, DOI 10.1007/978-3-319-09348-2__1 1
- Xem thêm -

Tài liệu liên quan