Debt, deficits and finite horizons-英文文献.pdf

NBER WORKING PAPER SERIES DEBT, DEFICITS AND FINITE HORIZONS Olivier J. Blanchard Working Paper No. 1389 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 June 19814 This paper was written for the February 19814 ISPE Seminar on Public Debt. Comments and suggestions by Andy Abel, Alan Auerbach, Ben Bernanke, Robert Barro, Guillernio Calvo, Rudi Dornbusch, Stan Fischer, Greg Mankiw, Franco Modigliani, Robert Solow and Martin Weitzman have improved this paper. I thank NSF for financial assistance. The research reported here is part of the NBERs research program in Economic Fluctuations and project in Government Budget. Any opinions expressed are those of the author and not those of the National Bureau of Economic Research. NBER Working Paper #1389 June 1984 Debt, Deficits and Finite Horizons ABSTRACT Many issues in macroeconomics, such as the level of the steady state interest rate, or the dynamic effects of government deficit finance, depend crucially on the horizon of economic agents. This paper develops a simple analytical model in which such issues can be examined and in which the horizon of agents is a parameter which can be chosen arbitrarily. The first three sections of the paper characterize the dynamics and steady state of the economy in the absence of a government. The focus is on the effects of the horizon index on the economy. The paper clarifies in particular the separate roles of finite horizons and declining labor income through life in the determination of steady state interest rates. The next three sections study the eff