Title of article :
‘‘Unfundedliabilities’’anduncertainfiscalfinancing$
Author/Authors :
Troy Davig، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2010
Pages :
20
From page :
600
To page :
619
Abstract :
A rationalexpectationsframeworkisdevelopedtostudytheconsequencesof alternativemeanstoresolvethe‘‘unfundedliabilities’’problem—unsustainable exponentialgrowthinfederalSocialSecurity,Medicare,andMedicaidspendingwith no plantofinanceit.Resolutionrequiresspecifyingaprobabilitydistributionforhow and whenmonetaryandfiscalpolicieswillchangeastheeconomyevolvesthroughthe 21st century.Beliefsbasedonthatdistributiondeterminetheexistenceofandthe natureofequilibrium.Weconsiderpoliciesthatinexpectationcombinereachinga fiscallimit,somedistortingtaxation,modestinflation,andsomerenegingonthe government’spromisedtransfers.Intheequilibrium,inflation-targetingmonetary policycannotsuccessfullyanchorexpectedinflation.Expectationaleffectsarealways present,butneednothavealargeimpactsoninflationandinterestratesintheshort and mediumruns.
Keywords :
Fiscal sustainabilityInflationFiscal limit
Journal title :
Journal of Monetary Economics
Serial Year :
2010
Journal title :
Journal of Monetary Economics
Record number :
846416
Link To Document :
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