Vermögenseffekte der Staatsverschuldung — Multiplikatorwirkungen und Implikationen für den „konjunkturneutralen öffentlichen Haushalt“

Abstract

Wealth Effects of Government

Debt In the first part, the multipliers of financing of a given budget deficit by way of central bank money and government borrowing are developed and analysed with the help of the first Blinder-Solow model. The multipliers with and without wealth effects are compared; the influence exerted on the multipliers by interest-dependent changes in the value of outstanding public debt is of particular interest. Among other things, it is shown that (1) in contrast to traditional analyses, the multipliers are now dependent, not only on modes of behaviour and budget parameters, but also on the initial economic situation) i. e., on the initial interest level and old public borrowings; (2) in the case of money-creation financing, the wealth effects from security prices may raise or lower multiplier, and the wealth effects always contribute to the crowding out of private investment; and (3) in the event of deficit financing by borrowing, changes in the prices of interest-bearing government bonds do not affect the direction, but do influence the intensity of wealth effects as a whole. In the second part, certain long-range aspecst of wealth effects are analysed with the help of, and for the purpose of assessing, the “cyclically neutral budget”. Compared to the short-term view, a growing production potential must be assumed, and it must be noted that private net wealth now contains, not only financial assets but also real capital. From this it follows that independent wealth effects of public debt that are independent of previous discretionary budget measures are no longer possible The SVR concept of a medium-term, constant equilibrium structure of the economy with given private investment, consumption and saving rates and a constant rate of new public borrowing is reconcilable - as is demonstrated - with wealth effects strictly speaking only when private net wealth and government interest payments are proportional to full-employment income and the equilibrium wealth structure does not vary over time. This, however, cannot be assumed since particularly the growth of production potential is not constant and the equilibrium structures are not dependent on the actual economic trend, i.e on cyclical fluctuations and actual borrowing behaviour.