Bubbles and constraints on debt accumulation
WebBubbles and Constraints on Debt Accumulation. Narayana Kocherlakota () . Working Papers from University of Iowa, Department of Economics. Keywords: economic equilibrium; investments (search for similar items in EconPapers) Pages: 29 pages Date: 1990 References: Add references at CitEc Citations: View citations in EconPapers (9) Track … Webvalue budget constraint, i.e. its intertemporal budget constraint (IBC) holds. In other words, the public deficit can be sustainable if the government can borrow. However, if the interest rate on thegovernment debt exceeds the growth rate of the economy, debt dynamics would lead to an ever-increasing ratio of debt to GDP.
Bubbles and constraints on debt accumulation
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WebRuling out bubbles under asymmetric information requires stronger assumptions: the presence of some uninformed agents and mild port-folio restrictions (debt or borrowing constraints), or alternatively, the existence of some impatient and fully informed agents. Keywords: portfolio constraints, rational bubbles, speculative bubbles, resale WebDec 15, 2024 · December 15, 2024. In 2024, we observed the largest one-year debt surge since World War II, with global debt rising to $226 trillion as the world was hit by a global health crisis and a deep recession. Debt was already elevated going into the crisis, but now governments must navigate a world of record-high public and private debt levels, new ...
WebFeb 1, 2005 · We show the existence of temporary bubbles, and we prove that cyclical equilibria may exist. In these equilibria, the economy experiences some periods without … Webbalance that will bring the debt ratio to a desired level over the long term, equation (22) below should be used with a suitably large, but finite, N. If N→∞, the result will be the primary balance p* compatible with a constant debt ratio at its current level (not at the target level). Balances that hit a given debt ratio in finite time
WebAbstract. We provide an infinite-horizon model of a production economy with bubbles, in which firms meet stochastic investment opportunties and face credit constraints. Capital … WebBubbles and constraints on debt accumulation. Narayana Kocherlakota () . Journal of Economic Theory, 1992, vol. 57, issue 1, 245-256 . Abstract: It is commonly thought …
WebAsset Bubbles and Credit Constraints† By Jianjun Miao and Pengfei Wang* We provide a theory of rational stock price bubbles in production economies with infinitely-lived …
Web∆ b t = i t - g t 1 + g t b t - 1 - p b t + d d a t ( e q . 1 ) Equation 1 (the typical debt accumulation equation) provides a simple accounting framework to decompose the change in the government gross debt-to-GDP ratio ( ∆ b t ) into its key drivers, consisting of: (i) the “snowball effect”, i.e. the impact of the difference between the average nominal interest … stansted airport easyjetWebsibility of asset price bubbles in dynamic asset markets under debt constraints. Debt constraints restrict the amount of debt an agent can carry on a portfolio at every … stansted airport educational visitsWebWe consider an overlapping generations model à la Diamond (1965) with two additional ingredients: altruism and an asset (or land) bringing non-stationary positive dividends (or fruits). We study the global dynamics of capital stocks and asset values as well as the interplay between them. Asset price bubbles are also investigated. peru school hbs collegeWebJun 1, 1992 · Bubbles and constraints on debt accumulation @article{Kocherlakota1992BubblesAC, title={Bubbles and constraints on debt … peru school closedWebJan 9, 2012 · Bubbles and constraints on debt accumulation. Article. Feb 1990; Narayana R. Kocherlakota; It is commonly thought (Tirole, Econometrica50 (1982), 1163–1182) that bubbles cannot occur in ... stansted airport enquiries phone numberWebOct 6, 2024 · Debt Burden: Significant growth volatility often associated with the impact of natural disasters and other exogenous shocks and weak fiscal management have contributed to substantial debt accumulation in many SSF countries. Public debt to GDP ratios for Small States are on average higher than for other developing countries, but … stansted airport duty free shoppingWebRational Asset Pricing Bubbles and Debt Constraints - Economics. EN. English Deutsch Français Español Português Italiano Român Nederlands Latina Dansk Svenska Norsk … peru school holidays