European Parliament Library

A Note on Public Debt, Tax-Exempt Bonds, and Ponzi Games, Berthold Wigger

Abstract
By issuing tax-exempt bonds, the government can incur debt and never pay back any principal or interest, even if the economy without public debt evolves on a dynamically efficient growth path. The welfare effects of such a Ponzi type borrowing scheme are mixed. The current young will unambiguously benefit.Depending on preferences and the aggregate technology, also a finite number of subsequent generations may benefit. The welfare of all generations thereafter, however, will be lower than in the economy without public debt
Table Of Contents
Contents; I. Introduction; II. The Model; III. The Feasibility of a Ponzi Game; IV. Welfare Implications; V. Conclusion; VI. Appendix; VII. References
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (20 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781452713793

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