%0 Journal Article %A Ho Yuan-Hong and Hunag Chiung-Ju %D 2015 %J International Journal of Economics and Management Engineering %B World Academy of Science, Engineering and Technology %I Open Science Index 102, 2015 %T The Optimal Public Debt Ceiling in Taiwan: A Simulation Approach %U https://publications.waset.org/pdf/10001969 %V 102 %X This study conducts simulation analyses to find the optimal debt ceiling of Taiwan, while factoring in welfare maximization under a dynamic stochastic general equilibrium framework. The simulation is based on Taiwan's 2001 to 2011 economic data and shows that welfare is maximized at a debt/GDP ratio of 0.2, increases in the debt/GDP ratio leads to increases in both tax and interest rates and decreases in the consumption ratio and working hours. The study results indicate that the optimal debt ceiling of Taiwan is 20% of GDP, where if the debt/GDP ratio is greater than 40%, the welfare will be negative and result in welfare loss. %P 2022 - 2026