TY  - GEN
AB  - We analyze effects of public debt in a basic endogenous growth model with
productive public spending. We demonstrate that a discretionary policy violates
the inter-temporal government budget constraint along a balanced growth path.
A balanced government budget gives a unique saddle point stable growth path.
With a rule based policy, two saddle point stable balanced growth paths can occur,
depending on the inter-temporal elasticity of substitution of consumption and on
the primary surplus policy. Higher debt goes along with smaller long-run growth
and we derive a condition such that a deficit financed increase in public spending
raises the growth rate.
DA  - 2013
DO  - 10.4119/unibi/2915434
KW  - Government debt
KW  - deficit rules
KW  - dynamics
KW  - endogenous growth
LA  - eng
PY  - 2013
SN  - 2196-2723
SP  - 25-
TI  - Public debt, productive public spending and endogenous growth
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-29154345
Y2  - 2024-11-22T10:57:20
ER  -