The economic effects of restrictions on government budget deficits: imperfect private credit markets
Christian Ghiglino and
Karl Shell ()
Economic Theory, 2003, vol. 21, issue 2, 399-421
Abstract:
The present paper is an extension of Ghiglino and Shell [7] to the case of imperfect consumer credit markets. We show that with constraints on individual credit and only anonymous (i.e., non-personalized) lump-sum taxes, strong (or “global”) irrelevance of government budget deficits is not possible, and weak (or “local”) irrelevance can hold only in very special situations. This is in sharp contrast to the result for perfect credit markets. With credit constraints and anonymous consumption taxes, weak irrelevance holds if the number of tax instruments is sufficiently large and at least one consumer's credit constraint is not binding. This is an extension of the result for perfect credit markets. Copyright Springer-Verlag Berlin Heidelberg 2003
Keywords: Keywords and Phrases: Balanced-budget amendment; Consumption taxes; Credit constraints; Government budget deficit irrelevance; Lump-sum taxes; Overlapping generations.; JEL Classification Numbers: D50; D90; E52; E60; H62; H63. (search for similar items in EconPapers)
Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
http://hdl.handle.net/10.1007/s00199-002-0288-5 (text/html)
Access to full text is restricted to subscribers.
Related works:
Working Paper: The Economic Effects of Restrictions on Government Budget Deficits: Imperfect Privte Credit Markets (2001) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:21:y:2003:i:2:p:399-421
Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2
DOI: 10.1007/s00199-002-0288-5
Access Statistics for this article
Economic Theory is currently edited by Nichoals Yanneils
More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().