In this paper our objective is to analyze sustainable debt policy rules and economic growth

using a model of endogenous economic growth theory. For the government it is possible to run

into debt, but, the primary surplus is a positive linear function of the debt-to-GDP ratio which

guarantees that public debt is sustainable. We analyze different sustainable debt policies in

this small open economy model of endogenous growth with public capital accumulation, as

well we take transitions into account. We investigate the characteristics and stability of the

steady state and we analyze the effects on welfare for the different debt policies.