Game Over: Simulating Unsustainable Fiscal Policy
Chapter in NBER book Fiscal Policy after the Financial Crisis (2013), Alberto Alesina and Francesco Giavazzi, editors (p. 177 - 202)
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.
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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