Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/89823 
Erscheinungsjahr: 
2013
Schriftenreihe/Nr.: 
IZA Discussion Papers No. 7805
Verlag: 
Institute for the Study of Labor (IZA), Bonn
Zusammenfassung: 
This paper examines fiscal policy without commitment and the effects of conditional bailout loans. The government relies on distortionary taxation and decides between full debt repayment and costly default. It tends to overborrow due to myopia, which induces default to be a relevant policy option and provides a rationale to constrain sovereign borrowing. We consider a lump-sum financed fund that offers loans at a favorable price and conditional upon minimum primary surpluses. While the government prefers defaulting in the most adverse states, we find that it is willing to accept conditional loans in close-to-default states. These bailouts can lead to an increase in the mean debt price and a lower default probability that are associated with enhanced household welfare. Yet, these outcomes can be reversed when bailouts are too generous, while public debt never decreases in the long-run when bailout loans are available.
Schlagwörter: 
discretionary fiscal policy
overborrowing
sovereign default
bailout loans
conditionality
JEL: 
E32
H21
H63
Dokumentart: 
Working Paper

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