Tax Austerity: Does It Avert Solvency Crises?
研究了高负债国家通过提高税率来应对债务上升的税收紧缩政策，发现这种政策可能降低有效债务上限，反而引发偿付能力危机。
Abstract Many high‐debt countries are adopting tax austerity, whereby governments raise the tax rate as their debt levels rise with the hope to dispel future solvency crises. This paper investigates the impact of tax austerity on government debt solvency. A solvency crisis occurs once adverse shocks push the debt above its effective debt limit, the maximum level of debt that the government can repay. I show that the position of the effective debt limit depends on tax austerity. I find that high‐debt countries like Italy that undergo tax austerity could lower their effective debt limit and induce a solvency crisis.