Suchergebnisse

This invaluable resource furnishes a comprehensive analysis of securities offered for sale by municipalities, states, and the Federal Government - examining in detail various methods of debt management used in the United States and assessing the historic development of U.S. government debt management as well as the relationship of debt to the economy.

Government debt is high in most developed countries, and while it may reflect short-term attempts to kick-start the economy in times of crisis through fiscal stimulus, the longer-term consequences risk being detrimental to investment and growth. This makes it important to identify factors that are associated with debt. While previous studies have related government debt to economic and political variables, they have not incorporated the degree to which the economy is regulated. Using regulatory freedom (absence of detailed regulation of labor, business and credit) from the Economic Freedom of the World index, we conduct an empirical analysis covering up to 67 countries in the period 1975-2010. The main finding is that regulatory freedom, especially for credit, affects debt development negatively. The effect is more pronounced when the political system is fractionalized and characterized by strong veto institutions, indicating policy stability and credibility, and when governments have a right-wing ideology.

We develop a new measure of relative debt transparency by comparing the amount of state debt reported in the annual Census survey and the amount reported in the statistical section of the state Comprehensive Annual Financial Report (CAFR). GASB 44 requires states to start reporting their total debt in the CAFR statistical section in FY 2006. However, states are allowed to use accounting choices to exclude some dependent agencies' debt, which contributes to a gap between the two data sources. The regression results suggest that the gap tends to increase when states face greater fiscal stress or less political competition. Such patterns are not found in the pre-GASB 44 period.

The price of a safe asset reflects not only the expected discounted future cash flows but also future service flows, since retrading allows partial insurance of idiosyncratic risk in an incomplete markets setting. This lowers the issuers' interest burden and allows the government to run a permanent (primary) deficit without ever paying back its debt. As idiosyncratic risk rises during recessions, so does the value of the service flows bestowing the safe asset with a negative ß. This resolves government debt valuation puzzles. Nevertheless, the government faces a "Debt Laffer Curve". The paper also has important implications for fiscal debt sustainability.

I analyze how lack of commitment affects the maturity structure of sovereign debt. Governments balance benefits of default induced redistribution and costs due to income losses in the wake of a default. Their choice of short- versus long- term debt affects default and rollover decisions by subsequent policy makers. The equilibrium maturity structure is shaped by revenue losses on inframarginal units of debt that reflect the price impact of these decisions. The model predicts an interior maturity structure with positive gross positions and a shortening of the maturity structure when debt issuance is high, output low, or a cross default more likely. These predictions are consistent with empirical evidence.

This article evaluates the rapid escalation of American household debt in relation to the changing dynamics of liberal welfare capitalism. Starting with the outcome of rising household debt levels during the credit and asset bubble of 2001–7 it argues that the failure of asset‐based welfare and the inability of households to move beyond their historical dependence on earned income made indebtedness essential to household social participation and protection. It examines the unique relationship of young adults (households headed by persons under age 35) and senior citizens (households headed by persons over age 65) to the liberal welfare regime, in particular the ways in which these relationships were shaped by the 2001–7 credit and asset bubble. By using a framework in which debt is analyzed as a claim against income, alongside other costs of social participation and daily living, we see the impact of the credit and asset boom on both young adults and senior citizens: growing indebtedness and financial insecurity.