2012年-IMF国际货币组织全球_Macroeconomic_and_Welfare_Costs_of_US_Fiscal_Imbalances_35页_1mb

Summary of "Macroeconomic and Welfare Costs of U.S. Fiscal Imbalances"

Core Content

This working paper by Bertrand Gruss and José L. Torres examines the macroeconomic and welfare consequences of U.S. fiscal imbalances using a dynamic stochastic general equilibrium (DSGE) model with heterogeneous agents, endogenous occupational choice, and labor supply. The model incorporates distortionary taxes, government debt, and entitlement spending as key variables to assess the long-term effects of fiscal policy on growth and welfare.

The study compares four alternative fiscal scenarios to evaluate the costs of delaying fiscal consolidation versus immediate fiscal reforms aimed at reducing federal debt to its pre-crisis level. It finds that prolonged inaction on fiscal imbalances leads to significant crowding-out of private investment, severe drag on growth, and permanent output and welfare losses. In contrast, gradual fiscal adjustment results in long-run welfare gains that offset the initial losses from consolidation.

Main Viewpoints

• Fiscal Imbalances and Debt Trends:
  The U.S. federal debt held by the public rose from 36% of GDP in 2007 to around 70% in 2011. If left unaddressed, it is projected to exceed 150% of GDP by 2030, according to the Congressional Budget Office (CBO). Entitlement programs (e.g., Social Security, Medicare, Medicaid) are the main source of fiscal imbalance, and their long-term sustainability is a key concern.

• Impact of Delaying Fiscal Adjustment:
  Delaying fiscal consolidation for two decades would result in:

  • A permanent output loss of about 17%.
  • A welfare loss of approximately 7% of lifetime consumption.
  • A significant crowding-out of private investment, which is an order of magnitude larger than the effects of tax design or government size.

• Benefits of Fiscal Consolidation:
  Stabilizing federal debt at a low level in the long run leads to welfare gains that outweigh the initial losses from the consolidation period. This implies that while fiscal adjustment may be costly in the short term, it can enhance long-term economic performance and household welfare.

• Model Characteristics:
  The model features:

  • Heterogeneous agents with different labor productivity and entrepreneurial ability.
  • Endogenous occupational choice (workers vs. entrepreneurs).
  • Distortionary taxes (labor, consumption, and income).
  • Borrowing constraints due to limited credit enforceability.
  • No lump sum taxation, which makes the model more realistic for analyzing redistributive and insurance effects of fiscal policy.

Key Information

Model Structure

• The model is closed economy with a continuum of infinitely lived agents.
• Each agent has preferences over consumption and leisure, with a utility function that includes leisure disutility and inter-temporal substitution.
• Agents face idiosyncratic shocks to labor productivity and entrepreneurial ability, which are modeled as autoregressive Markov processes.
• Occupational choice is determined by maximizing after-tax income.
• Entrepreneurs combine capital, labor, and entrepreneurial ability to produce output, and face collateral constraints due to limited credit enforcement.
• The government raises revenue via distortionary taxes and issues one-period non-contingent bonds, while providing lump-sum transfers (proxy for entitlement spending) and public consumption.
• The financial intermediation sector is perfectly competitive, and capital markets clear through the supply and demand of capital.

Calibration

• The model is calibrated using U.S. data from 2007, including fiscal policy parameters, tax rates, government spending, and debt levels.
• Parameters such as discount factor (β = 0.91), relative risk aversion (σ = 1.5), and Frisch elasticity (1/φ - 1 = 0.5) are set to match empirical evidence.
• The external finance premium (ψ = 1.7%) is calibrated to reflect the spread between risky and risk-free bonds.
• The collateral constraint tightness (λ = 1.5) is set to match the average ratio of liabilities over assets for entrepreneurs.

Policy Experiments

• Delay Scenario: Maintains current fiscal policies for 20 years, then increases taxes to stabilize debt.
• Adjust Scenarios: Includes immediate fiscal reform to gradually reduce debt to its pre-crisis level, based on the Bowles-Simpson Commission's plan.
• The simulations show that delaying fiscal adjustment has severe long-term consequences, including lower growth, higher debt, and welfare losses.
• The long-run welfare gains from debt stabilization outweigh the initial adjustment costs.

Conclusion

The paper concludes that fiscal consolidation is essential for debt sustainability and economic growth in the U.S. The welfare costs of delaying consolidation are substantial, with 17% output loss and 7% welfare loss. However, gradual fiscal adjustment leads to positive long-term outcomes. The model also highlights the importance of government debt in influencing the equilibrium real interest rate, which is not captured in representative agent models.

The study contributes to the macroeconomic literature on fiscal policy by incorporating heterogeneous agents, occupational choice, and financial constraints, offering a more accurate assessment of the costs and benefits of fiscal reforms.