“…First, the results relate to the literature on fiscal closure rules, as typically used in large scale macroeconomic models. In this literature it is widely understood that different instruments, when residually used to enforce the intertemporal budget constraint of the government, lead to different dynamic outcomes which preclude simple comparisons across simulations, as discussed in Bryant and Zhang (1996), Mitchell et al (2000), and Pérez and Hiebert (2002). Yet, by construction, this literature offers few explicit analytical findings and we are not aware of a systematic discussion of the role of government debt in this context.…”