Hatchondo, Juan Carlos
Fiscal rules and the sovereign default premium / by Juan Carlos Hatchondo, Leonardo Martinez and Francisco Roch
Resumen
Bibliografía
e study fiscal rules using a sovereign default model. A debt-brake (spread-brake) rule imposes a ceiling on the fiscal deficit when the sovereign debt (spread) is above a threshold. For our benchmark calibration, similar gains can be achieved with the optimal debt or spread brake. However, for a "Union" of heterogeneous economies, a common spread brake generates larger gains than a common debt brake. Furthermore, gains from abandoning a common debt brake may be significant for economies that are unnecessarily constrained by the rule. In contrast, abandoning a common spread brake would generate losses for any economy in the Union.
POLITICA FISCAL
DEUDA PUBLICA
DEFICIT PUBLICO
ESTADOS UNIDOS
Martinez, Leonardo
Roch, Francisco
American Economic Journal : Macroeconomics 1945-7707 v. 14, n. 4, October 2022, p. 244-273
Fiscal rules and the sovereign default premium / by Juan Carlos Hatchondo, Leonardo Martinez and Francisco Roch
Resumen
Bibliografía
e study fiscal rules using a sovereign default model. A debt-brake (spread-brake) rule imposes a ceiling on the fiscal deficit when the sovereign debt (spread) is above a threshold. For our benchmark calibration, similar gains can be achieved with the optimal debt or spread brake. However, for a "Union" of heterogeneous economies, a common spread brake generates larger gains than a common debt brake. Furthermore, gains from abandoning a common debt brake may be significant for economies that are unnecessarily constrained by the rule. In contrast, abandoning a common spread brake would generate losses for any economy in the Union.
POLITICA FISCAL
DEUDA PUBLICA
DEFICIT PUBLICO
ESTADOS UNIDOS
Martinez, Leonardo
Roch, Francisco
American Economic Journal : Macroeconomics 1945-7707 v. 14, n. 4, October 2022, p. 244-273