Advertisement

Optimal Funding Policy

  • Robert J. Barro
Part of the International Economic Association Series book series (IEA)

Abstract

In standard macroeconomics, fiscal policy consists of choices about expenditures, taxes, and debt issue. The kinds of public spending may be distinguished in terms of their interaction with private decisions; for example, some public activities would influence private production and some would interact with the choices of consumption and leisure. The taxes may also be differentiated by type — levies may fall on labour income, capital income, consumption, bodies and so on.

Keywords

Real Exchange Rate Government Spending Real Interest Rate Labour Income Public Debt 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Alesina, A., Prati, A. and Tabellini, G. (1990) ‘Public Confidence and Debt Management: A Model and a Case Study of Italy’ in Dornbusch, R. and Draghi, M. (eds) Public Debt Management: Theory and History (Cambridge, UK: Cambridge University Press).Google Scholar
  2. Bank of England (1995) The U.K. Index-Linked Gilt-Edged Market: Future Development’, overview papers for the conference of 14–15 September 1995, London, UK.Google Scholar
  3. Barro, R. J. (1979) ‘On the Determination of the Public Debt’, Journal of Political Economy, vol. 87, October, pp. 940–71.CrossRefGoogle Scholar
  4. Barro, R. J. (1987) ‘Govemment Spending, Interest Rates, Prices, and Budget Deficits in the United Kingdom, 1730–1918’, Journal of Monetary Economics, vol. 20, September, pp. 221–47.CrossRefGoogle Scholar
  5. Barro, R. J. (1992) ‘World Interest Rates and Investment’, Scandinavian Journal of Economics, vol. 94, no. 2, pp. 323–42.CrossRefGoogle Scholar
  6. Barro, R. J. (1995) ‘Optimal Debt Management’, working paper no. 5327, October, National Bureau of Economic Research, Cambridge, Mass., USA.CrossRefGoogle Scholar
  7. Barro, R. J. and Grilli, V. (1994) European Macroeconomics (London, Macmillan).CrossRefGoogle Scholar
  8. Board of Governors of the Federal Reserve System (1943) Banking and Monetary Statistics (Washington DC: National Capital Press).Google Scholar
  9. Bohn, H. (1988) ‘Why Do We Have Nominal Government Debt?’, Journal of Monetary Economics, vol. 21, January, pp. 127–40.CrossRefGoogle Scholar
  10. Bohn, H. (1990) ‘Tax Smoothing with Financial Instruments’, American Economic Review, vol. 80, December, pp. 1217–30.Google Scholar
  11. Breedon, F. (1995) ‘Bond Prices and Market Expectations of Inflation’, Bank of England Quarterly Bulletin, vol. 35, May, pp. 160–5.Google Scholar
  12. Calvo, G. and Guidotti, P. (1990) ‘Indexation and Maturity of Government Bonds: An Exploratory Model’, in Dornbusch, R. and Draghi, M. (eds) Public Debt Management: Theory and History (Cambridge, UK: Cambridge University Press).Google Scholar
  13. Chamley, C. (1986) ‘Optimal Taxation of Capital Income in General Equilibrium with Infinite Lives’, Econometrica, vol. 54 (May), pp. 607–22.CrossRefGoogle Scholar
  14. Chari, V. V., Christiano, L. J. and Kehoe, P. J. (1994) ‘Optimal Fiscal Policy in a Business Cycle Model’, Journal of Political Economy, vol. 102, no. 2, pp. 617–52.CrossRefGoogle Scholar
  15. Friedman, M. (1959) A Program for Monetary Stability (New York: Fordham University Press).Google Scholar
  16. Giavazzi, F. and Pagano, M. (1990) ‘Confidence Crises and Public Debt Management’, in Dombusch, R. and Draghi, M. (eds) Public Debt Management: Theory and History (Cambridge, UK: Cambridge University Press).Google Scholar
  17. Judd, K. L. (1985) ‘Redistributive Taxation in a Simple Perfect-Foresight Model’, Journal of Public Economics, vol. 28 (October), pp. 59–83.CrossRefGoogle Scholar
  18. Judd, K. L. (1991) ‘Optimal Taxation in Dynamic Stochastic Economies: Theory and Evidence’, unpublished paper, January, Hoover Institution, Stanford University, California, USA.Google Scholar
  19. Kydland, F. E. and Prescott, E. C. (1990) ‘Business Cycles: Real Facts and a Monetary Myth’, Quarterly Review, Federal Reserve Bank of Minneapolis, Spring, pp. 3–18.Google Scholar
  20. Lucas, R. E. and Stokey, N. L. (1983) ‘Optimal Fiscal and Monetary Policy in an Economy without Capital’ Journal of Monetary Economics, vol. 12, July, pp. 55–93.CrossRefGoogle Scholar
  21. McCulloch, J. R. (1846) The Works of David Ricardo (London: John Murray).Google Scholar
  22. Missale, A. and Blanchard, O. J. (1994) The Debt Burden and Debt Maturity’, American Economic Review, vol. 84, March, pp. 309–19.Google Scholar
  23. Mitchell, B. R. and Deane, P. (1962) Abstract of British Historical Statistics (Cambridge, UK: Cambridge University Press).Google Scholar
  24. Persson, T. and Svensson, L. E. O. (1984) Time-Consistent Fiscal Policy and Government Cash-Flow’, Journal of Monetary Economics, vol. 14, November, pp. 365–74.CrossRefGoogle Scholar
  25. Pigou, A. C. (1928) A Study in Public Finance (London: Macmillan).Google Scholar
  26. Shiller, R. J. (1993) Macro Markets, Creating Institutions for Managing Societys Largest Economic Risks (Oxford: Clarendon Press).Google Scholar
  27. Tobin, J. (1971) ‘An Essay on the Principles of Debt Management’, in Tobin, J. Essays in Economics, Volume 1, Macroeconomics (Chicago: Markham Publishing Company).Google Scholar

Additional References

  1. Blanchard, O. J. (1990) ‘Discussion of “The Efficient Design of Public Debt” by D. Gale’, in Dornbusch, R. and Draghi, M. (eds) Public Debt Management: Theory and History (Cambridge, UK: Cambridge University Press).Google Scholar
  2. De Fontenay, P., Milesi-Ferretti, G. M. and Pill, H. (1995) ‘The Role of Foreign Currency Debt in Public Debt Management’, IMF working paper no. 95/21, IMF, Washington DC, USA.Google Scholar
  3. Gale, D. (1990) The Efficient Design of Public Debt’, in Dombusch, R. and Draghi, M. (eds) Public Debt Management: Theory and History (Cambridge, UK: Cambridge University Press).Google Scholar
  4. Goldfajn, I. (1995) ‘On Public Debt Indexation and Denomination’, mimeo, MIT, Cambridge, Mass., USA.Google Scholar
  5. King, R. (1990) ‘Observable Implications of Dynamically Optimal Taxation’, working paper, University of Rochester, New York, USA.Google Scholar
  6. Missale, A. (1996) ‘Tax Smoothing with Price Indexed Bonds: A Case Study of Italy and the United Kingdom’, mimeo, Innocenzo Gasparini Institute for Economic Research, Milan, Italy.Google Scholar

Copyright information

© International Economic Association 1998

Authors and Affiliations

  • Robert J. Barro
    • 1
  1. 1.Harvard UniversityUSA

Personalised recommendations