Public Debt, Productive Public Spending and Economic Growth with Full Employment

Alfred Greiner and Bettina Fincke ()
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Bettina Fincke: Bielefeld University

Chapter Chapter 4 in Public Debt and Economic Growth, 2009, pp 83-110 from Springer

Abstract: Abstract This chapter presents an endogenous growth model with productive public capital and analyzes growth and welfare effects of three different public debt strategies: the balanced government budget, the scenario where public debt grows in the long-run, but at a smaller rate than capital and consumption, and the scenario where public debt grows at the same rate as capital and consumption. The first two strategies yield the same long-run growth rate that exceeds the one of the third scenario. As concerns welfare the third scenario also performs worst while there is evidence that the second scenarios is better than the first.

Keywords: Human Capital; Public Investment; Public Debt; Full Employment; Debt Ratio (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:spr:dymchp:978-3-642-01745-2_4

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DOI: 10.1007/978-3-642-01745-2_4

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