Optimal taxation without state-contingent debt

To recover a version of Barro's (1979) `random walk'tax smoothing outcome, we modify Lucas and Stokey's (1983) economyto permit only risk--free debt. This imparts near unit root like behaviorto government debt, independently of the government expenditureprocess, a realistic outcome in the spirit of Barro's. We showhow the risk--free--debt--only economy confronts the Ramsey plannerwith additional constraints on equilibrium allocations thattake the form of a sequence of measurability conditions.We solve the Ramsey problem by formulating it in terms of a Lagrangian,and applying a Parameterized Expectations Algorithm tothe associated first--order conditions. The first--order conditions andnumerical impulse response functions partially affirmBarro's random walk outcome. Though the behaviors oftax rates, government surpluses, and government debts differ, allocationsare very close for computed Ramsey policies across incomplete and completemarkets economies.

Nominal debt as a burden on monetary policy

We study the effects of nominal debt on the optimal sequential choice of monetary policy. When the stock of debt is nominal, the incentive to generate unanticipated inflation increases the cost of the outstanding debt even if no unanticipated inflation episodes occur in equilibrium. Without full commitment, the optimal sequential policy is to deplete the outstanding stock of debt progressively until these extra costs disappear. Nominal debt is therefore a burden on monetary policy, not only because it must be serviced, but also because it creates a time inconsistency problem that distorts interest rates. The introduction of alternative forms of taxation may lessen this burden, if there is enough commtiment to fiscal policy. If there is full commitment to an optimal fiscal policy, then the resulting monetary policy is the Friedman rule of zero nominal interest rates.

Lending to the borrower from hell: Debt and default in the age of Philip II, 1556-1598

What sustained borrowing without third-party enforcement, in the early days of sovereignlending? Philip II of Spain accumulated towering debts while stopping all payments tohis lenders four times. How could the sovereign borrow much and default often? Weargue that bankers ability to cut off Philip II s access to smoothing services was key. Aform of syndicated lending created cohesion among his Genoese bankers. As a result,lending moratoria were sustained through a cheat the cheater mechanism (Kletzer andWright, 2000). Our paper thus lends empirical support to a recent literature emphasizingthe role of bankers incentives for continued sovereign borrowing.

Is bank debt special for the transmission of monetary policy? Evidence from the stock market

We combine existing balance sheet and stock market data with two new datasets to studywhether, how much, and why bank lending to firms matters for the transmission of monetarypolicy. The first new dataset enables us to quantify the bank dependence of firms precisely,as the ratio of bank debt to total assets. We show that a two standard deviation increase inthe bank dependence of a firm makes its stock price about 25% more responsive to monetarypolicy shocks. We explore the channels through which this effect occurs, and find that thestock prices of bank-dependent firms that borrow from financially weaker banks display astronger sensitivity to monetary policy shocks. This finding is consistent with the banklending channel, a theory according to which the strength of bank balance sheets mattersfor monetary policy transmission. We construct a new database of hedging activities andshow that the stock prices of bank-dependent firms that hedge against interest rate riskdisplay a lower sensitivity to monetary policy shocks. This finding is consistent with aninterest rate pass-through channel that operates via the direct transmission of policy ratesto lending rates associated with the widespread use of floating-rates in bank loans and creditline agreements.

Sovereign debt markets in turbulent times: Creditor discrimination and crowding-out effects

In 2007, countries in the Euro periphery were enjoying stable growth, low deficits, and lowspreads. Then the financial crisis erupted and pushed them into deep recessions, raising theirdeficits and debt levels. By 2010, they were facing severe debt problems. Spreads increased and,surprisingly, so did the share of the debt held by domestic creditors. Credit was reallocatedfrom the private to the public sectors, reducing investment and deepening the recessions evenfurther. To account for these facts, we propose a simple model of sovereign risk in which debtcan be traded in secondary markets. The model has two key ingredients: creditor discriminationand crowding-out effects. Creditor discrimination arises because, in turbulent times, sovereigndebt offers a higher expected return to domestic creditors than to foreign ones. This providesincentives for domestic purchases of debt. Crowding-out effects arise because private borrowingis limited by financial frictions. This implies that domestic debt purchases displace productiveinvestment. The model shows that these purchases reduce growth and welfare, and may lead toself-fulfilling crises. It also shows how crowding-out effects can be transmitted to other countriesin the Eurozone, and how they may be addressed by policies at the European level.

Schedule of Debt Service and Coverage for Iowa State University of Science and Technology for the Academic Building Revenue Bond Funds for the year ended June 30, 2009

Schedule of Debt Service and Coverage for Iowa State University of Science and Technology for the Academic Building Revenue Bond Funds for the year ended June 30, 2009

Consumer Advisory Bulletin; Beware of “Debt Settlement” Companies, June 2010

The Attorney General’s Consumer Protection Division receives hundreds of calls and consumer complaints every year. Follow these tips to avoid unexpected expense and disappointments. This record is about: Beware of “Debt Settlement” Companies

The Impact of Monetary Union on EU-15 Sovereign Debt Yield Spreads

With European Monetary Union (EMU), there was an increase in the adjusted spreads (corrected from the foreign exchange risk) of euro participating countries' sovereign securities over Germany and a decrease in those of non-euro countries. The objective of this paper is to study the reasons for this result, and in particular, whether the change in the price assigned by markets was due to domestic factors such as credit risk and/or market liquidity, or to international risk factors. The empirical evidence suggests that market size scale economies have increased since EMU for all European markets, so the effect of the various risk factors, even though it differs between euro and non-euro countries, is always dependent on the size of the market.

2010 Iowa Court Debt Amnesty

During its 2010 Session the General Assembly enacted Senate File 2383 creating a Debt Amnesty Program for certain outstanding court debts. The Amnesty provided that fifty percent of outstanding eligible debt be forgiven upon payment of a lump sum equal to fifty percent of the eligible debt. The Amnesty was offered from September 1 through November 30.

Audit report of the accompanying Schedule of Debt Service and Coverage for Iowa State University of Science and Technology as of February 10, 2012 for the Athletic Facilities Revenue Bond Funds

Audit report of the accompanying Schedule of Debt Service and Coverage for Iowa State University of Science and Technology as of February 10, 2012 for the Athletic Facilities Revenue Bond Funds

Extinction debt of high-mountain plants under 21st-century climate change

Quantitative estimates of the range loss of mountain plants under climate change have so far mostly relied on static geographical projections of species' habitat shifts(1-3). Here, we use a hybrid model(4) that combines such projections with simulations of demography and seed dispersal to forecast the climate-driven spatio-temporal dynamics of 150 high-mountain plant species across the European Alps. This model predicts average range size reductions of 44-50% by the end of the twenty-first century, which is similar to projections from the most 'optimistic' static model (49%). However, the hybrid model also indicates that population dynamics will lag behind climatic trends and that an average of 40% of the range still occupied at the end of the twenty-first century will have become climatically unsuitable for the respective species, creating an extinction debt(5,6). Alarmingly, species endemic to the Alps seem to face the highest range losses. These results caution against optimistic conclusions from moderate range size reductions observed during the twenty-first century as they are likely to belie more severe longer-term effects of climate warming on mountain plants.

The Impact of Monetary Union on EU-15 Sovereign Debt Yield Spreads

With European Monetary Union (EMU), there was an increase in the adjusted spreads (corrected from the foreign exchange risk) of euro participating countries' sovereign securities over Germany and a decrease in those of non-euro countries. The objective of this paper is to study the reasons for this result, and in particular, whether the change in the price assigned by markets was due to domestic factors such as credit risk and/or market liquidity, or to international risk factors. The empirical evidence suggests that market size scale economies have increased since EMU for all European markets, so the effect of the various risk factors, even though it differs between euro and non-euro countries, is always dependent on the size of the market.

Consumer Advisory: Student Loans & Loan Debt,July 2013

The Attorney General’s Consumer Protection Division receives hundreds of calls and consumer complaints every year. Follow these tips to avoid unexpected expense and disappointments. This record is about: Student Loans & Loan Debt

Audit report of the Schedule of Debt Service and Coverage for Iowa State University of Science and Technology for the Dormitory Revenue Refunding Bonds for the year ended June 30, 2012

Audit report of the Schedule of Debt Service and Coverage for Iowa State University of Science and Technology for the Dormitory Revenue Refunding Bonds for the year ended June 30, 2012