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Article

Финансовая репрессия и популизм

Экономическая политика. 2018. Т. 13. № 1. С. 122-147.

Due to its implicit nature, financial repression is a convenient fiscal policy measure for the populist government. Financial repression gives the opportunity for the populist government to finance more government spending with less explicit taxes. The optimal parameters of financial repression in the form of nonmarket debt placement are determined for the populist government. Populism is introduced by the choice of government spending and tax on capital higher and lower respectively than those chosen through voting procedure. Overlapping generations model with fully funded pension system and financial repression is used to determine optimal fiscal policy of the populist government. Moreover, the influence of the two fiscal regimes on the household’s welfare is considered.  It is shown that financial repression in the form of nonmarket debt placement is an element of optimal fiscal policy for the populist. Such government will set gross interest rate on government bonds lower than the gross interest on capital. However, this choice is not accompanied by the pension wealth confiscation. Optimal financial repression is more moderate as population growth rate is higher, populist degree is lower and the lower is the elasticity of substitution between consumption and government spending. Financial repression regime is associated with the higher welfare compared to the voting regime without populism. The result is the consequence of the fact that populist policy allows to reduce distorting capital tax rate and replace it by lump-sum financial repression. Due to its implicit nature, financial repression is a convenient fiscal policy measure for the populist government. Financial repression gives the opportunity for the populist government to finance more government spending with less explicit taxes. The optimal parameters of financial repression in the form of nonmarket debt placement are determined for the populist government. Populism is introduced by the choice of government spending and tax on capital higher and lower respectively than those chosen through voting procedure. Overlapping generations model with fully funded pension system and financial repression is used to determine optimal fiscal policy of the populist government. Moreover, the influence of the two fiscal regimes on the household’s welfare is considered.  It is shown that financial repression in the form of nonmarket debt placement is an element of optimal fiscal policy for the populist. Such government will set gross interest rate on government bonds lower than the gross interest on capital. However, this choice is not accompanied by the pension wealth confiscation. Optimal financial repression is more moderate as population growth rate is higher, populist degree is lower and the lower is the elasticity of substitution between consumption and government spending. Financial repression regime is associated with the higher welfare compared to the voting regime without populism. The result is the consequence of the fact that populist policy allows to reduce distorting capital tax rate and replace it by lump-sum financial repression. Due to its implicit nature, financial repression is a convenient fiscal policy measure for the populist government. Financial repression gives the opportunity for the populist government to finance more government spending with less explicit taxes. The optimal parameters of financial repression in the form of nonmarket debt placement are determined for the populist government. Populism is introduced by the choice of government spending and tax on capital higher and lower respectively than those chosen through voting procedure. Overlapping generations model with fully funded pension system and financial repression is used to determine optimal fiscal policy of the populist government. Moreover, the influence of the two fiscal regimes on the household’s welfare is considered.  It is shown that financial repression in the form of nonmarket debt placement is an element of optimal fiscal policy for the populist. Such government will set gross interest rate on government bonds lower than the gross interest on capital. However, this choice is not accompanied by the pension wealth confiscation. Optimal financial repression is more moderate as population growth rate is higher, populist degree is lower and the lower is the elasticity of substitution between consumption and government spending. Financial repression regime is associated with the higher welfare compared to the voting regime without populism. The result is the consequence of the fact that populist policy allows to reduce distorting capital tax rate and replace it by lump-sum financial repression.