Collateral, Liquidity and Debt Sustainability
研究了存在金融摩擦和主权违约的经济中，政府债券作为抵押品和流动性工具如何影响最优财政政策，发现债务可持续性在违约选项下仍可维持，但违约会损害市场流动性并引发持续减记。
We study Markov‐perfect optimal fiscal policy in an economy with financial frictions and sovereign default in the form endogenously determined haircuts on outstanding debt. Government bonds facilitate tax smoothing but also provide collateral and liquidity services that mitigate financial frictions. A debt Laffer curve exists, which induces the government to issue bonds to a point where marginal debt has negative welfare effects. Debt positions in the order of magnitude of annual output remain sustainable despite the option to default. When default happens, liquidity on the bond market is impaired, which can trigger extended periods of recurrent haircuts.