Dynamic Efficiency, the Riskless Rate and Debt Ponzi Games Under Uncertainty

In a dynamically efficienct economy, can a government roll its debt forever and avoid the need to raise taxes? In a series of examples of production economies with zero growth, this paper shows that such Ponzi games may be infeasible even when the average rate of return on bonds is negative, and may be feasible even when the average rate of return on bonds is positive. The paper then reveals the structure which underlies these examples

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Year of publication:	2003
Authors:	Blanchard, Olivier ; Weil, Philippe
Publisher:	[S.l.] : SSRN
Subject:	Risiko \| Risk \| Theorie \| Theory \| Effizienz \| Efficiency \| Öffentliche Schulden \| Public debt \| Overlapping Generations \| Overlapping generations

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