{
  "title": "A Party without a Hangover? On the Effects of U.S. Government Deficits",
  "publication": "IMF Working Papers, August 1, 2007",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/a-party-without-a-hangover-on-the-effects-of-u-s-21269",
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  "summary": "This paper develops a 2-country New Keynesian overlapping generations model suitable for the joint evaluation of monetary and fiscal policies. We show that a permanent increase in U.S. government deficits raises the world real interest rate and significantly increases U.S.",
  "sections": [
    {
      "heading": "Model and approach",
      "content": "- Develops a 2-country New Keynesian overlapping generations model suitable for the joint evaluation of monetary and fiscal policies.\n- Highlights the suitability of overlapping generations framework for analyzing permanent changes in public or private sector savings rates.\n- Argues that conventional infinite horizon models are ill-equipped to deal with issues involving permanent changes in public or private sector savings rates."
    },
    {
      "heading": "Key findings",
      "content": "- A permanent increase in U.S. government deficits raises the world real interest rate.\n- A permanent increase in U.S. government deficits significantly increases U.S. current account deficits, especially in the medium- to long-run.\n- A simultaneous increase in non-U.S. savings lowers the world real interest rate.\n- A simultaneous increase in non-U.S. savings further increases U.S. current account deficits."
    },
    {
      "heading": "Themes and subjects",
      "content": "- Consumption\n- Current account deficits\n- Fiscal policy\n- Public debt\n- Real interest rates"
    },
    {
      "heading": "Keywords and technical focus",
      "content": "- present discounted value\n- WP"
    },
    {
      "heading": "Publication and authorship (as presented on the page)",
      "content": "- By Douglas Laxton, Michael Kumhof\n- August 1, 2007\n\nLaxton, Douglas, and Michael Kumhof. \"A Party without a Hangover? On the Effects of U.S. Government Deficits\", IMF Working Papers 2007, 202 (2007).\n\n---\n\n Content in this bundle\n\n- 1. OverlappingGenerationsHouseholds\n  - 1. OverlappingGenerationsHouseholds (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1. OverlappingGenerationsHouseholds (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/a-party-without-a-hangover-on-the-effects-of-u-s-21269"
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    "Authors: Douglas Laxton, Michael Kumhof",
    "Published: August 1, 2007",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451867664.001",
    "Develops a 2-country New Keynesian overlapping generations model suitable for the joint evaluation of monetary and fiscal policies.",
    "Highlights the suitability of overlapping generations framework for analyzing permanent changes in public or private sector savings rates.",
    "Argues that conventional infinite horizon models are ill-equipped to deal with issues involving permanent changes in public or private sector savings rates.",
    "A permanent increase in U.S. government deficits raises the world real interest rate.",
    "A permanent increase in U.S. government deficits significantly increases U.S. current account deficits, especially in the medium- to long-run.",
    "A simultaneous increase in non-U.S. savings lowers the world real interest rate.",
    "A simultaneous increase in non-U.S. savings further increases U.S. current account deficits.",
    "Consumption",
    "Current account deficits",
    "Fiscal policy",
    "Public debt",
    "Real interest rates",
    "present discounted value",
    "WP",
    "By Douglas Laxton, Michael Kumhof",
    "August 1, 2007",
    "**1. OverlappingGenerationsHouseholds**"
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