Articles liés à Fiscal Rules, Bailouts, and Reputation in Federal Government...

Fiscal Rules, Bailouts, and Reputation in Federal Governments: A Report on Alessandro Dovis and Rishabh Kirpalani's 2018 paper - Couverture souple

Roschitsch, Ulrich

 
9783668969131: Fiscal Rules, Bailouts, and Reputation in Federal Governments: A Report on Alessandro Dovis and Rishabh Kirpalani's 2018 paper
Couverture souple
ISBN 10 : 3668969132 ISBN 13 : 9783668969131
Editeur : Grin Verlag, 2019

Synopsis

Seminar paper from the year 2019 in the subject Economics - Other, grade: 1.0, University of Mannheim (Department of Economics), course: Topics on Monetary Union, language: English, abstract: The question of why regions, that cooperate in a federal union, overborrow-meaning that they issue more debt than would be beneficial from a point-of-view of intertemporal efficiency-is of utmost relevance in many contexts. Traditionally, the role of fiscal rules (i.e. caps on debt issuance levels with punishment payments upon violation) has been emphasized in overcoming the root of the problem: that central authorities in federal unions cannot commit to not use their funds to bail out overindebted members at the expense of other members. Dovis & Kirpalani, however, ask an important question: what happens if the central authority also cannot commit to enforcing the fiscal rules? In their paper, they show that if the central authority has a low reputation (i.e. low probability of enforcing the fiscal rules and the no-bailout-clause), fiscal rules are not only ineffective, but they can even lead to a higher debt issuance and exacerbate the overborrowing problem. This report aims at outlining Dovis & Kirpalani's reasoning for their central claim, thus sketching out their proofs and providing intuition for their results. Furthermore, a short assessment of their paper is provided, centering on validity and possible extensions.

Les informations fournies dans la section « Synopsis » peuvent faire référence à une autre édition de ce titre.

À propos de la quatrième de couverture

Seminar paper from the year 2019 in the subject Economics - Other, grade: 1.0, University of Mannheim (Department of Economics), course: Topics on Monetary Union, language: English, abstract: The question of why regions, that cooperate in a federal union, overborrow¿meaning that they issue more debt than would be beneficial from a point-of-view of intertemporal efficiency¿is of utmost relevance in many contexts. Traditionally, the role of fiscal rules (i.e. caps on debt issuance levels with punishment payments upon violation) has been emphasized in overcoming the root of the problem: that central authorities in federal unions cannot commit to not use their funds to bail out overindebted members at the expense of other members. Dovis & Kirpalani, however, ask an important question: what happens if the central authority also cannot commit to enforcing the fiscal rules? In their paper, they show that if the central authority has a low reputation (i.e. low probability of enforcing the fiscal rules and the no-bailout-clause), fiscal rules are not only ineffective, but they can even lead to a higher debt issuance and exacerbate the overborrowing problem. This report aims at outlining Dovis & Kirpalani¿s reasoning for their central claim, thus sketching out their proofs and providing intuition for their results. Furthermore, a short assessment of their paper is provided, centering on validity and possible extensions.

Les informations fournies dans la section « A propos du livre » peuvent faire référence à une autre édition de ce titre.

Éditeur
Grin Verlag
Date d'édition
2019
Langue
anglais
ISBN 10 
3668969132
ISBN 13 
9783668969131
Reliure
Broché
Nombre de pages
24
Coordonnées du fabricant
GRIN Publishing GmbH
info@grin.com

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