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MORIMOTO KEIICHI
Department Undergraduate School , School of Political Science and Economics Position Associate Professor |
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| Language | English |
| Publication Date | 2017/02 |
| Type | Academic Journal |
| Peer Review | Peer reviewed |
| Title | Debt policy rules in an open economy |
| Contribution Type | Co-authored (first author) |
| Journal | Journal of Public Economic Theory |
| Journal Type | Another Country |
| Publisher | Wiley-Blackwell |
| Volume, Issue, Page | 19(1),pp.158-177 |
| Author and coauthor | Keiichi Morimoto, Takeo Hori, Noritaka Maebayashi, Koichi Futagami |
| Details | In a small open economy model of endogenous growth with public capital accumulation, we examine the effects of a debt policy rule under which the government must reduce its debt–GDP ratio if it exceeds the criterion level. To sustain public debt at a finite level, the government should adjust public spending rather than the income tax rate. The long‐run debt–GDP ratio should be kept sufficiently low to avoid equilibrium indeterminacy. Under sustainability and determinacy, a tighter (looser) debt rule brings welfare gains when the world interest rate is relatively high (low). |
| DOI | 10.1111/jpet.12197 |