| Project/Area Number |
25870236
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| Research Category |
Grant-in-Aid for Young Scientists (B)
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| Allocation Type | Multi-year Fund |
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| Research Field |
Economic policy
Public finance/Public economy
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| Research Institution | Hosei University |
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Principal Investigator |
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| Project Period (FY) |
2013-04-01 – 2015-03-31
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| Project Status |
Completed (Fiscal Year 2014)
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| Budget Amount *help |
¥3,770,000 (Direct Cost: ¥2,900,000、Indirect Cost: ¥870,000)
Fiscal Year 2014: ¥1,820,000 (Direct Cost: ¥1,400,000、Indirect Cost: ¥420,000)
Fiscal Year 2013: ¥1,950,000 (Direct Cost: ¥1,500,000、Indirect Cost: ¥450,000)
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| Keywords | 公的債務 / 財政調整ルール / 国債金利 / 民間資本 / 財政危機 / 国債消化 / 金融危機 / 財政赤字 |
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| Outline of Final Research Achievements |
In this study, we analyse the relationship between interest rates on government bonds (GB) and the fiscal consolidation rule by using an overlapping generation model with endogenous and stochastic growth settings. Our key findings are summarized as follows. First, contrary to conventional view, we find that interest rates on GB may decline as public debt accumulates relative to private capital. Second, the simulation reveals that the economy may exhibit discrete changes with divergent interest rates, implying that the observed trend of relatively low interest rates on GB with public debt accumulation may not continue indefinitely in the future. Third, fiscal consolidation rule plays a key role in determining equilibrium interest rates.
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