Creator: Miller, Preston J. and Todd, Richard M. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Dept.) Number: 494 Abstract:
This paper investigates the macroeconomic and welfare effects of a particular public finance decision. That decision was to use debt rather than current taxation to finance deposit insurance payments related to the savings and loan debacle. We find that this decision could have significantly raised real interest rates and affected welfare. The analysis is conducted in a dynamic, open-economy, monetary general equilibrium model in which parameters are set based on empirical observations.
Keyword: Real interest rates, Deposit insurance, Public finance, Savings and loan, Taxation, Welfare, Government debt, and S & L Subject (JEL): H63 - National budget, deficit, and debt - Debt ; Debt management and G21 - Financial institutions and services - Banks ; Other depository institutions ; Micro finance institutions ; Mortgages
Creator: Bryant, John B. and Wallace, Neil. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Dept.) Number: 189 Keyword: Prohibition, Government debt, Rate of return dominance, and Private currency Subject (JEL): E52 - Monetary policy, central banking, and the supply of money and credit - Monetary policy and E40 - Money and interest rates - General
Creator: Aiyagari, S. Rao. and McGrattan, Ellen R. Series: Staff Reports (Federal Reserve Bank of Minneapolis) Number: 203 Keyword: Borrowing constraints, Government debt, and Precautionary saving Subject (JEL): H6 - National Budget, Deficit, and Debt and E60 - Macroeconomic policy, macroeconomic aspects of public finance, and general outlook - General