Faut-il financer l'investissement public par emprunt ?. Les enseignements d'un modèle de croissance endogène

Alexandru Minea and Patrick Villieu

Revue économique, 2008, vol. 59, issue 1, 5-32

Abstract: In this paper, we look for long-run and short-run effects of fiscal deficits on economic growth and welfare in a standard endogenous growth model. We show that, under very general hypotheses, the Golden Rule of Public Finance?, which allows a government to run a deficit if this deficit is devoted to public investment, leads to a lower balanced growth path in the long-run, and eventually in the short-run. Welfare effects are more difficult to assess. Our model shows that fiscal deficit rules like the Golden Rule may improve or weaken intertemporal welfare, depending on parameter values, and especially on the value of the consumption elasticity of substitution. Classification JEL : H62, H63, E62

JEL-codes: E62 H62 H63 (search for similar items in EconPapers)
Date: 2008
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Working Paper: Faut-il financer l'investissement public par emprunt? Les enseignements d'un modèle de croissance endogène (2008)
Working Paper: Faut-il financer l'investissement public par emprunt? Les enseignements d'un modèle de croissance endogène (2008)
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