MARC Record from Library of Congress

LEADER: 02078cam a22003017a 4500
001 2007616494
003 DLC
005 20070922103000.0
007 cr |||||||||||
008 070905s2007 mau sb 000 0 eng
010 $a 2007616494
040 $aDLC$cDLC
050 00 $aHB1
100 1 $aAguiar, Mark.
245 10 $aInvestment cycles and sovereign debt overhang$h[electronic resource] /$cMark Aguiar, Manuel Amador, Gita Gopinath.
260 $aCambridge, MA :$bNational Bureau of Economic Research,$cc2007.
490 1 $aNBER working paper series ;$vworking paper 13353
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 9/5/2007.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"We characterize optimal taxation of foreign capital and optimal sovereign debt policy in a small open economy where the government cannot commit to policy and seeks to insure a risk averse domestic constituency. The expected tax on capital is shown to vary with the state of the economy, generating cyclicality in investment and debt in an environment where the first best capital stock is a constant. The government's lack of commitment induces a negative correlation between investment and the stock of government debt, a "debt overhang'' effect. If the government discounts the future at a rate higher than the market, then capital oscillates indefinitely at a level strictly below the first best. Debt relief is never Pareto improving and cannot affect the long-run level of investment. Further, restricting the government to a balanced budget can eliminate the cyclical distortion of investment"--National Bureau of Economic Research web site.
700 1 $aAmador, Manuel.
700 1 $aGopinath, Gita,$d1971-
710 2 $aNational Bureau of Economic Research.
830 0 $aWorking paper series (National Bureau of Economic Research : Online) ;$vworking paper no. 13353.
856 40 $uhttp://papers.nber.org/papers/w13353