Calendrier du 07 octobre 2021
Macroeconomics Seminar
Du 07/10/2021 de 16:00 à 17:15
PSE- 48 boulevard Jourdan, 75014 Paris, salle R2-21
PIGUILLEM Facundo (Einaudi Institute for Economics and Finance)
Sticky Spending, Sequestration, and Government Debt
écrit avec Alessandro Riboni
Once established, government spending programs tend to continue. Spending inertia can lead to unsustainable debt levels that require fiscal stabilization, such as “sequestration.” We develop a political economy model of debt with sticky spending by assuming that the government must maintain a fraction of past spending. We show that inertia
insures against the risk of political turnover, which may reduce politicians’ incentives to accumulate debt. However, if preexisting commitments are large, as in the current U.S. context, inertia exacerbates incentives to increase debt; faced with the prospect of stabilization, the government overspends to “dilute” the spending commitments of past administrations.
TOM (Théorie, Organisation et Marchés) Lunch Seminar
Du 07/10/2021 de 12:30 à 13:30
Salle R1.14 - Campus Jourdan 75014 PARIS
MACé Antonin (PSE)
*