03 - John Cochrane on Finance, the Fiscal Theory of the Price Level, and Blogging
Macro Musings with David Beckworth
00:00
The Fiscal Theory and Government Debt
Present value of futures surpluses is not this year's income, it's the present value of future surpluses. And governments are very, very long-lived. If the U.S wants to run surpluses, we're talking 40, 50 years of surplus. Governments pay back their debts over extraordinarily long amounts of time. The second... One thing we've learned crystal clear from asset prices is that stock prices reflect discount rates as much or more than they reflect actual cash payment of dividends.
Transcript
Play full episode
