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A note on public debt, tax-exempt bonds, and Ponzi games

By:

Wigger, Berthold U

Material type: Text

TextPublication details: IMF [Washington]US 2007Description: 18 pAction note:

3/19/09 JOYD

Summary: Demonstrates that government can run a Ponzi game if the economy without public debt is dynamically efficient. This becomes possible when the return on private bonds or equity is taxed and the government issues tax-exempt bonds. Notes that unlike a traditional Ponzi game, the welfare effects of a Ponzi game based on the issuance of tax-exempt bonds are rather mixed.

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Holdings
Item type	Current library	Call number	Status	Barcode
Monograph	CARICOM Documentation Centre	11.01.01 W655 (Browse shelf(Opens below))	Available	0000000027850

Demonstrates that government can run a Ponzi game if the economy without public debt is dynamically efficient. This becomes possible when the return on private bonds or equity is taxed and the government issues tax-exempt bonds. Notes that unlike a traditional Ponzi game, the welfare effects of a Ponzi game based on the issuance of tax-exempt bonds are rather mixed.

3/19/09 JOYD

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