86,857 research outputs found
Ponzi game in OLG model with endogenous growth and productive government spending
No full textBarro's model is an AK model, and there cannot be dynamic inefficiency since the social yield of the capital is higher than the growth rate. But it may be that the private yield and thus the interest rate are lower than the growth rate. One can thus have a Ponzi game and the government can allow a permanent roll-over of debt and cut taxes. However we show that in this model since the capital is under-accumulated, playing a Ponzi game produces a crowding-out of capital and reduces the growth rate and welfare. The practical message of this article is that even when the interest rate is lower than the growth rate, the public debt is not a Pareto improvement when it generates a crowding-out of capital and reduces endogenous growth.Public debt, public spending, endogenous growth, Ponzi game
Empirical Assessment of Sustainability and Feasibility of Government Debt: The Philippines Case
No full textThis paper develops empirical methods of assessing the sustainability and feasibility of public debt using the No Ponzi Game criterion, using the Philippines as the testing case. Both historical data and forecasts generated by a quarterly macro-econometric model are used in the assessment. Stochastic simulations are carried out to mimic future uncertainty. The test results show that, up to the end of the present administration in 2010, the Philippine government debt is not sustainable but weakly feasible, that the feasibility is vulnerable to major adverse shocks, and that simple budgetary deficit control policy is inadequate for achieving debt sustainability or strengthening feasibility.Government debt, Ponzi game, Rollover bond portfolio
Competitive equilibria in infinite-horizon collateralized economies with default penalties
No full textAraújo, Páscoa and Torres-Martinez (2002) have shown that, without imposing either debt constraints or transversality conditions, Ponzi schemes are ruled out in infinite horizon economies with default when collateral is the only mechanism that partially secures loans. Páscoa and Seghir (2008) subsequently show that Ponzi schemes may reappear if, additionally to the seizure of the collateral, there are sufficiently harsh default penalties assessed (directly in terms of utility) against the defaulters. They also claim that if default penalties are moderate then Ponzi schemes are ruled out and existence of a competitive equilibrium is ensured. The objective of this paper is two fold. First, contrary to what is claimed by Páscoa and Seghir (2008), we show that moderate default penalties do not always prevent agents to run a Ponzi scheme. Second, we provide an alternative condition on default penalties that is sufficient to rule out Ponzi schemes and ensure the existence of a competitive equilibrium.
Endogenous debt constraints in collateralized economies with default penalties
No full textIn infinite horizon financial markets economies, competitive equilibria fail to exist if one does not impose restrictions on agents' trades that rule out Ponzi schemes. When there is limited commitment and collateral repossession is the unique default punishment, Araujo, Páscoa and Torres-Martínez (2002) proved that Ponzi schemes are ruled out without imposing any exogenous/endogenous debt constraints on agents' trades. Recently Páscoa and Seghir (2009) have shown that this positive result is not robust to the presence of additional default punishments. They provide several examples showing that, in the absence of debt constraints, harsh default penalties may induce agents to run Ponzi schemes that jeopardize equilibrium existence.The objective of this paper is to close a theoretical gap in the literature by identifying endogenous borrowing constraints that rule out Ponzi schemes and ensure existence of equilibria in a model with limitedcommitment and (possible) default. We appropriately modify the definition of finitely effective debt constraints, introduced by Levine and Zame (1996) (see also Levine and Zame (2002)), to encompass models with limited commitment, default penalties and collateral. Along this line, we introduce in the setting of Araujo, Páscoa and Torres-Martínez (2002), Kubler and Schmedders (2003) and Páscoa and Seghir (2009) the concept of actions with finite equivalent payoffs. We show that, independently of the level of default penalties, restricting plans to have finite equivalent payoffs rules out Ponzi schemes and guarantees the existence of an equilibrium that is compatible with the minimal ability to borrow and lend that we expect in our model.An interesting feature of our debt constraints is that they give rise to budget sets that coincide with the standard budget sets of economies having a collateral structure but no penalties (as defined in Araujo,Páscoa and Torres-Martínez (2002)). This illustrates the hidden relation between finitely effective debt constraints and collateral requirements.
Analyzing the sustainability of fiscal deficitsin developing countries
No full textThe author surveys the recent literature on the sustainability of fiscal deficits, most of which focuses on the United States and other industrial countries, to see how useful it might be in developing countries. The accounting approach to analysis focuses on steady states and assumes that a fiscal deficit (or surplus) that leads to unchanging debt/GDP ratios over time is sustainable. The data required to apply this approach are relatively modest. The present-value constraint (PVC) approach assumes that the sustainability of fiscal policy depends ultimately on what level of fiscal deficit is financeable, which depends in turn on the behavior of lenders. Recent empirical implementations of this approach concentrate on methods for testing whether maintaining current fiscal policy (as captured by historical time series on government spending, revenue, and debt) violates the present-value-constraint or, equivalently, the no-Ponzi-game (NPG) condition. The econometric methods used in this literature (such as tests for the prsence of unit roots and cointegration) require long-time series over a constant fiscal regime, requirements that may be unrealistic in many countries. Typically, analyzing the sustainability of deficits in developing countries involves issues that are not particularly important in industrialized countries. Developing countries rely far more on seignorage to finance deficits, although the degree of that reliance varies greatly among countries; the simultaneous presence of both domestic and foreign-currency borrowing is central in a growing number of developing countries; and concessional lending and grants may also be an important part of fiscal finance. The author generalizes the PVC approach to economies that use money-financing of deficits, economies for which concessional financing is available, and economies that incur both domestic and foreign debt. He proposes a possible compromise in approaches: rather than use time series techniques to describe constant fiscal regimes, one can specify fiscal rules into the foreseeable future based on country-specific information about fiscal targets (perhaps as stated in IMF stabilization programs). Then one can calculate the implied time path for domestic and foreign debt, given current debt levels as initial conditions. Using this hypothesized time path for debt, one can ask whether it satisfies the no-Ponzi-game condition. If it does, fiscal policy is -by this definition- sustainable. If the NPG condition is violated, fiscal policy is unsustainable.Economic Theory&Research,Environmental Economics&Policies,Payment Systems&Infrastructure,Banks&Banking Reform,Strategic Debt Management,Economic Theory&Research,Economic Stabilization,Banks&Banking Reform,Strategic Debt Management,Environmental Economics&Policies
Naples as Topography of Spaces In-between: Walter Benjamin and the Threshold between Old and New
No full textThe urban space is the privileged place to get to know the modern age with its euphoric constuctivism also with its destructive character. It is known that the city model used by Walter Benjamin is Paris; less known is the fact that at the base of his studies of the metropolis as “space” of the modernity has been another model of great city, in which the threshold between the Old and the New draw more complex implications. Benjamin perceives the topographical disposition of the modernity’s spaces: metropolis as Paris and Berlin have different characteristics compared to great cities as Naples, Marseille or Moscow. Naples is a “threshold”, a “space in between”, it is “archaic” and post-modern at the same time; the threshold between old and new takes the form of an access to the underworld (Pozzuoli) and mythical-magical world, an intermediate space where modernity, technology and the archetypal world might be confused. We can find in the modern metropolis not only the traces of the ancient city, its ruins, not only in the psyche of modern man are layered traces of archetypes, dreams and traumas of ancient and even primitive man, but Benjamin also refers to what happens in the "underground" of Paris, in sewers, subways, basements, in the underground topography of the metropolis. This Mediterranean, ancient, primitive threshold leads directly to the origin of Western civilization in Crete, to the primordial rites, to the myth of the labyrinth. Paradoxically, just as Benjamin descends “down”, in the “underground”, in the places of the Mythical, the Magical, the “Sacred”, he takes a “political” action: his raids in these areas take for him the value of a political-cultural battle against those who wanted to interpret as “inevitable” and in a certain way “unexplained” the phenomena of modernity
Sistema Ponzi vs sistema multinivel: aproximación legal de los multiniveles
No full textArtículo de investigaciónEl trabajo presenta un análisis comparativo entre un sistema multinivel o de mercadeo y un sistema Ponzi o tipo piramidal, teniendo como base la legislación colombiana, específicamente la ley 1700/2013 y el decreto 24/2016. Con esto se logra obtener los primeros criterios legales de diferenciación entre modelos de comercialización legales de los ilegales.PregradoAbogado20 p.Introducción
1. Orígenes sistema Ponzi
2. Multinivel en Colombia
3. Criterios de diferenciación
4. Condiciones de afectación
Conclusione
Risultati Generali delle Campagne di Lancio Effettuate da Marzo 1999 a Febbraio 2000 presso il Poligono Equatoriale San Marco, Malindi - Kenya, e loro applicazione alla calibrazione di dati ambientali provenienti da misure satellitari.
No full textFocus on East Africa Atmosphere: a study of the atmospheric profiles using satellite and “in situ” measurements
No full text- …
