NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Game Over: Simulating Unsustainable Fiscal Policy

Richard W. Evans, Laurence J. Kotlikoff, Kerk L. Phillips

Chapter in NBER book Fiscal Policy after the Financial Crisis (2013), Alberto Alesina and Francesco Giavazzi, editors (p. 177 - 202)
Conference held December 12-13, 2011
Published in June 2013 by University of Chicago Press
© 2013 by the National Bureau of Economic Research

This chapter uses a stochastic general equilibrium model to determine how long it takes for unsustainable fiscal policy to produce game over--the point where the policies can no longer be maintained. When the economy reaches game over, the government is forced to default on its promised payment to the contemporaneous elderly.

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This chapter first appeared as NBER working paper w17917, Game Over: Simulating Unsustainable Fiscal Policy, Richard W. Evans, Laurence J. Kotlikoff, Kerk L. Phillips
Commentary on this chapter: Comment, Douglas W. Elmendorf
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