Government Debt and Private Leverage: An Extension of the Miller Theorem

Robert L. McDonald

No 965, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper shows how government financing decisions can influence the corporate decision to use debt or equity finance. In particular, it is shown that an increase in the stock of taxable government debt reduces the equilibrium quantity of corporate debt, and that an increase in the stock of tax-free government debt reduces the equilibrium quantity of corporate equity. The effects of inflation rate and tax rate changes are also considered.

Date: 1982-08
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as McDonald, Robert L. "Government Debt and Private Leverage: An Extension ofthe Miller Theorem." Journal of Public Economics, Vol. 22, No. 3, (December 1983), pp. 303-325.

Downloads: (external link)
http://www.nber.org/papers/w0965.pdf (application/pdf)

Related works:
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:nbr:nberwo:0965

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w0965

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().